current on payments & short sale?

[Jillian118]

I read somewhere that if you were current during the short sale process that you could purchase a home again rather quickly. does anyone have any information on this. My home is in Southern california, Inland empire area.

[faith]

Originally Posted by Jillian118

I read somewhere that if you were current during the short sale process that you could purchase a home again rather quickly. does anyone have any information on this. My home is in Southern california, Inland empire area.

Hello and welcome to this forum,
Short Sale will affect your credit around 50 to 200 points. Lenders will only accept Short Sale if you're in financial hardship, behind in payments in 60-90 days, your home must be listed with a real estate agent within 60 -90 days. You can buy a house again after Short Sale in 2 years. You have to meet the lenders new guidelines like 20% or more down payment, job security etc.

The link below may help you about Short Sale process.

http://www.loansafe.org/forum/short-sale-outpost/

http://www.loansafe.org/forum/short-sale-outpost/14207-national-city-short-sale-help.html

God bless and take care.

[Lhuynh]

Originally Posted by Jillian118

I read somewhere that if you were current during the short sale process that you could purchase a home again rather quickly. does anyone have any information on this. My home is in Southern california, Inland empire area.

why would you want to pay during a short sale period.. shouldn't you be using that money to move out. After 12-18months you can buy another home if you do a shortsale.

[Jillian118]

Originally Posted by Lhuynh

why would you want to pay during a short sale period.. shouldn't you be using that money to move out. After 12-18months you can buy another home if you do a shortsale.

I understand what you are saying. The way it was written made is seem like if you were current during a short sale, that once that sale was completed, your credit wouldn't be impacted and then you could purchase again right away. It just got me thinking is all. I am current on my loan, trying for a mod for the last 9 months, and I thought "well if I can offload this house and buy the same floor plan right around the corner for about half with no credit ding...then why not"

Just trying to think outside the box.

[faith]

Originally Posted by Jillian118

I understand what you are saying. The way it was written made is seem like if you were current during a short sale, that once that sale was completed, your credit wouldn't be impacted and then you could purchase again right away. It just got me thinking is all. I am current on my loan, trying for a mod for the last 9 months, and I thought "well if I can offload this house and buy the same floor plan right around the corner for about half with no credit ding...then why not"

Just trying to think outside the box.

If a borrower can show that they are struggling to make payments or are facing some other type of hardship such as a divorce, tenant moving, job transfer, medical emergency, decrease in pay, etc., then a bank will seriously consider approving a short sale.

In Short Sale your lender will report to the credit bureaus as” paid settled in less than full balance.” It’s better than foreclosure but according to Fannie Mae and Freddie Mac guidelines you have to wait 2 years before you can buy another house, while foreclosure you have to wait 7 years.

[faith]

Here's a new report from Daily Mortgage:

According to Daily Mortgage Report
New Mortgage Guidelines Go Into Effect And They’re Harsh
Effective Tuesday, September 1, conforming mortgage approvals are due to toughen up again.

Fannie Mae is imposing strict new lending guidelines that should slow down purchase and refinance activity in Cincinnati and parts elsewhere.

Ina public announcement, Fannie Mae defends its pending changes, citing high levels of unemployment, a surge in mortgage fraud, and general market fluctuations.

It's the first major conforming mortgage guideline change since April and this one is a big one -- 15 separate underwriting areas are affected.

Are sampling of the across-the-board guideline changes includes:

• Credit, income and asset documentation can't be more than 90 days old. The former guidelines allowed for 120 days.
• Lenders must compare actual federal tax returns from the IRS to a borrower's supplied income documentation. Previously, this review step was at the lender's discretion.
• "Tip" income for service persons must be documented and verified.
• Trailing secondary wage earning is now prohibited. This means that Proctor & Gamble employees relocating to Cincinnati can't use a spouse's "expected" Cincinnati income until that spouse actually has a job.
• Stocks, bonds and mutual funds are "worth" 70% of their current market value as reserve funds. Formerly, securities were taken at 100% of value.
• Retirement assets are counted at 60% of their current market value. Formerly, retirement assets were taken at 70% of value.

By themselves, these bullet points would kick a bevy of home loans from the underwriting queue. Waiters can no longer claim tip income; relocating families can't use both spouses' income. But of all the changes Fannie Mae is making, the biggest deal may be its new restrictions on home loans tied to 2-unit properties.


Until now, Fannie Mae had viewed 2-units homes as "safe", assigning them the same liberal underwriting policies as for a single-family home. Today, not so much.
Refinancing owners and new buyers of 2-unit homes now face higher minimum FICO requirements and lower maximum LTVs.

Using your 2-unit as a Primary Residence:

• Purchase: Maximum LTV lowered to 80%; 640 minimum FICO.
• Rate-and-Term Refinance: Maximum LTV lowered to 80%; 640 minimum FICO.
• Cash Out Refinance: Maximum LTV lowered to 75%; 680 minimum FICO.

Using your 2-Unit as an Investment Property

• Purchase: Maximum LTV lowered to 75%; 660 minimum FICO.
• Rate-and-Term Refinance: Maximum LTV lowered to 75%; 660 minimum FICO.
• Cash Out Refinance: Maximum LTV lowered to 70%; 680 minimum FICO.

Fannie Mae's new 2-unit guidelines restrict loan-to-value and raise FICO minimums by up to 15 percent and 40 points, respectively. Because of it, fewer 2-unit mortgage applicants will qualify for mortgages.
This should slow purchase and refinance activity in the 2-unit market.
Meanwhile, Fannie Mae's changes aren't in place just yet -- September 1, 2009 is the "effective date". So, if you have a 2-unit home to refinance or purchase, consider getting a move on. You don't have to be closed by September 1 -- you just have to be in underwriting.

[cmcgreanor]

take a look at Q6 and Q7 of this link. I have found some lenders attaching it to their underwriting approval.


https://www.efanniemae.com/sf/guides...f/0816faqs.pdf

[mbmullen]

Jillian,

Just so you know, the guidelines for short sales are changing all the time. I closed one in June for a client who had not missed a payment until May. Chase agreed to the short sale while she was current on her payments. Also, not all lenders are requiring that the property be listed for 60-90 days.

I list the property at the payoff amount and after a couple of weeks drop the price to Fair Market Value and usually get at least one offer quickly.

Again, the rules change all the time and a lot depends on your lender. The process is getting easier, though, if your agent is doing a diligent and thorough job for you.

Good luck!

[faith]

Originally Posted by mbmullen

Jillian,

Just so you know, the guidelines for short sales are changing all the time. I closed one in June for a client who had not missed a payment until May. Chase agreed to the short sale while she was current on her payments. Also, not all lenders are requiring that the property be listed for 60-90 days.

I list the property at the payoff amount and after a couple of weeks drop the price to Fair Market Value and usually get at least one offer quickly.

Again, the rules change all the time and a lot depends on your lender. The process is getting easier, though, if your agent is doing a diligent and thorough job for you.

Good luck!

Jillian,
I agree with Mcmullen, some lenders may have change their Short Sale process, some may approve it right away and some may not, but if it's CW or BA it takes 4 months or longer. I've seen some of the posts here that it's hard to deal with Chase. You have to price the home right from the beginning so you don't have to drop the price every week like I did.

You have to cooperate with your agent. I did not listen to my agent, he told me price it right, but I said I paid $500k and I wanted to list it at $499k, so he did. No one even look at my house, then after a month, we dropped the price at $399k even though the selling prices at the time was $300k, no one showed up. Finally after having my house in the market for 4 months, I dropped it at $290k, there were 6 offers but all backed out due to CW long process and the listing expired.

I've checked the BBB site and I found a very honest, reputable, trustworthy and hard working agent who has experienced in Short Sale. I've listed it again at Century 21, We have received 4 offers right away, one offered I rejected due to low offer.

It took 4 months for CW to approve it and another 19 days for escrow. It took a while because my agent and I wants to make sure that they put everything in writing that CW, it's investors and insurers will not pursue any deficiency judgement against us. And thank God we did, we have everything in writing and was able to use it to file a dispute against the credit bureaus that CW and BA put in my credit report. They still reported that my husband and I owed the 2nd mortgage, when I sent a dispute letter with a copy of the letters and email I've received from the negotiator. CW/BA and the credit bureaus sent me letter correcting the information and it showed zero balance, paid in less than full balance. Hope this helps.

Wish you the best.

[babbles]

Originally Posted by mbmullen

Jillian,

Just so you know, the guidelines for short sales are changing all the time. I closed one in June for a client who had not missed a payment until May. Chase agreed to the short sale while she was current on her payments. Also, not all lenders are requiring that the property be listed for 60-90 days.

I list the property at the payoff amount and after a couple of weeks drop the price to Fair Market Value and usually get at least one offer quickly.

Again, the rules change all the time and a lot depends on your lender. The process is getting easier, though, if your agent is doing a diligent and thorough job for you.

Good luck!

My rental property is located in GA and I am in Colorado. 9 months ago when I was in it, I applied for a modification through EMC/Chase with a medical hardship and the fact the ARM has started to adjust effective 1 Sep 09. I am in a tough situation as well where I am current on payments and my tenants just walked out. The balance on my (3 liens) is 275k and the property is only worth 181k. The amount owed on the 1st is 164k and the property is worth 181k.

(1). Would EMC consider a short sale? (2). My 2nd & 3rd liens have my wife on them (at least the deeds) but I want to keep my obligation to the 2 other liens by any means necessary. Would those other 2 liens possibly consider settling or converting those liens to secure loans? What is the best way to persue this?

[Indy&Citi]

Originally Posted by faith

Lenders will only accept Short Sale if you're in financial hardship, behind in payments in 60-90 days, your home must be listed with a real estate agent within 60 -90 days.

With all due respect, this is absolutely NOT true! I successfully completed a short sale and was NEVER late on a payment. My home was only listed with a real estate agent for one week before I received an offer. The process took 4 months but luckily for me the couple who submitted the offer stuck it out and ended up with a great house at a great price!