Connecticut Real Estate News & Community Info

Home Ownership After Foreclosure, Short Sale, Bankruptcy; When Can I Buy Again?

"DREAM" IT'S THE AMERICAN WAY!

Are these questions running through your head?

OR

Have you simply put them out of your mind?

Can I buy a home again in this lifetime?

Is the dream of Home Ownership over for me?

How long will I have to wait to get a home loan?

I had my chance; they aren't going to give me another one, or will they?

                          

Yes they will, it's just a matter of when!

WAITING PERIOD (Your time to rebuild)

FORECLOSURE:          If you have a "Foreclosure" looming on your credit your "time to rebuild" is 3 years!

SHORT SALE:              If you sold your home in a "Short Sale" you have 2 years to rebuild if your payments were delinquent. If you were not delinquent in your payments, your time is now!

BANKRUPTCY:        With a "Bankruptcy" you have 4 years to rebuild unless it was a Chapter 13 (reorganization) in which case you have 3 years to rebuild.

DEED IN LIEU OF FORECLOSURE:  With a "Deed in Lieu of foreclosure" you will have 4 years to rebuild and possibly only 2 if there are extenuating circumstances.

 

Certainly not as bleak as many of us would have believed!

Begin your process by holding on to your job, cleaning up your debt to income ratio and banking for a down payment. Your dream really can come true and I will be here to help you through, answering questions and pointing you to the right professionals to help you gain that pre-approval!

 

If you want something, giving up will never get you there! As american's we are tougher than that and can accomplish all of our dreams with a plan of action and good old fashioned determination!

Changes effective July 1, 2010

 

Sandi Andrews of Mortgage Master Inc. has just delivered the following updates to me!

PLEASE READ FOR THE MOST CURRENT CHANGES...

 

Advising Foreclosure, Short Sale and Deed-in-Lieu Clients

 

If you are working with a client who has had a short sale or a deed-in-lieu in their past, or you are listing a home and your sellers may have the same issues, FannieMae announced new waiting periods, as of July 1, 2010, before being eligible for another loan.  The waiting period is defined as "from the date of the pre-foreclosure to the date of application".  These policies favor borrowers that work with their servicers to avoid Full Foreclosure either by Deed-in-Lieu, Pre-foreclosure Sale, or Short Sale.

 

·          Fannie defines ALL Pre-foreclosures as any one of the following three event types:

o    Deed-in-Lieu

o    Preforeclosure Sale

o    Short Sale

·          Full Foreclosure - Current applications wait 5 yrs;

As of applications dated October 1, 2010 - 7 yrs

 

New Waiting Periods Effective for July 1, 2010 Applications

Pre-foreclosure Event	Current Waiting Period Requirements	New Waiting Period Requirements for all three event types
Deed-in-Lieu of Foreclosure	4 years Additional requirements apply after 4 years up to 7 years	·          2 years - 80% maximum LTV ratios ·          4 years - 90% maximum LTV ratios ·          7 years - Standard LTV ratios
Pre-foreclosure Sale	2 years
Short Sale	No specific policy currently exists
For extenuating circumstances, for all 3 event scenarios, it's a 2-year waiting time and 90% LTV

 

Waiting Periods for Other Derogatory Events

 

Ever wonder how long your clients have to wait to apply for another loan after they've filed Bankruptcy?  Here are the rules, so you can advise prospect/clients and not waste your time if they don't meet these requirements!

 

What's an "Extenuating Circumstance"?  If your clients had a job loss, major medical bills, an accident, etc., then they don't have to wait as long.  However, documentation is critical, as clients have to PROVE they had financial difficulties BEYOND their control.

 

Derogatory Event	Waiting Period Requirements	Waiting Period with Extenuating Circumstances
Bankruptcy - Chapter 7 or 11	4 years	2 years
Bankruptcy - Chapter 13	2 years from discharge date  4 years from dismissal date	2 years from discharge date 2 years from dismissal date
Multiple Bankruptcy Filings	5 years if more than one filing within the past 7 years	3 years from the most recent discharge or dismissal date
Foreclosure	7 years	3 years * Additional requirements after 3 years up to 7 years: ·  90% maximum LTV ratios ·  Purchase, principal residence ·  Limited cash-out refi, all occupancy types
The maximum LTV ratios permitted are the lesser of the LTV ratios in this table or the maximum LTV ratios for the transaction per the Eligibility Matrix.

 

 

I want to be there to assist you in making your "Dreams Come True"!