"Short" Sale Information.

[BrokeOR]

BTW:

We moved our closing up. Signed today, closes August 2, retaining non-owner occupancy until August 31. 13 months with no rent or mortgage...Heaven!

[calgirl67]

Cool. Yes I agree on all realtors are not created equal, we've had excellent ones in the past but the last one we used to buy this place was completely useless, did nothing and ended up costing us a ton of money because of his incompetence.

So I guess you got a HAFA short sale. We're looking at going that way - did you have a 2nd mortgage also? We have a 1st, 2nd & 3rd, all with Wells Fargo.

[BrokeOR]

Yikes-no, we "only" had one mortgage albeit a very large one! Don't know how it works with a 2nd and a 3rd.

A tip that you may be out in front of: Our original mortgage was written with Wells Fargo, but they sold it shortly after to Bank America-a fact we were completely unaware of until we started having issues paying them. Apparently, it is common for a lender to sell the loan but retain the servicing contract, all without notifying the seller of who the actual investor is. So, it would be a good idea for you to identify just exactly who holds the paper on your loans. WF can tell you who the actual investor of each is, as long as they are still the servicer.

In attempting a short sale, you (or your realtor if you're smart) will deal directly with WF. If, however, your loans are actually owned by another entity, there will be an additional step of "investor approval" after the WF negotiators have approved the sale.

[mom2three09]

Ok, I really need clarification on the issue of a short sale after a BK 7 (home was IIB).... we already must wait 2 yrs to get a new mortgage because of our bankruptcy, but if we choose to also do a short sale on our home will that add time to the post BK 2 yrs?

We would like to avoid foreclosure since we will not be allowed to buy again for 2 yrs from the FC date ... We will be 1 yr post-bk this Nov. so we only have about 14 months before we can buy again if we stay here & pay our mrtg or we just sell it and get 100% of what is owed on the loan. We are 2 months late on the mortgage and have been offered a SS by BofA. We wouldn't mind doing a SS if we could still buy another home once we are 2 yrs post-BK.

Does anyone know?

[HHM]

Ok, I really need clarification on the issue of a short sale after a BK 7 (home was IIB).... we already must wait 2 yrs to get a new mortgage because of our bankruptcy, but if we choose to also do a short sale on our home will that add time to the post BK 2 yrs?

We would like to avoid foreclosure since we will not be allowed to buy again for 2 yrs from the FC date ... We will be 1 yr post-bk this Nov. so we only have about 14 months before we can buy again if we stay here & pay our mrtg or we just sell it and get 100% of what is owed on the loan. We are 2 months late on the mortgage and have been offered a SS by BofA. We wouldn't mind doing a SS if we could still buy another home once we are 2 yrs post-BK.

Does anyone know?

As for re buying, it will THREE years from foreclosure OR short sale. The only benefit you have with a short sale is you might get it done a little sooner than a foreclosure so the 3 year clock starts sooner. Sorry, the 3 years will start from when the house actually changes hands. In your case, the 2 years from BK won't matter, the banks will go off the 3 year foreclosure/short sale time frame for giving you another mortgage.

The only exception is if you stay current on your mortgage all the way through the short sale process, in that case, it is only 1 year from short sale.

Keep in mind, those are FHA guidelines, conventional financing has much longer timelines. Also, just because your are eligible, doesn't mean they will lend to you. If you have a lot of bad payment history on other accounts, they may still deny you.

[calgirl67]

I have called and asked tons of loan brokers this question and this is the common reply:

2 yrs after BK you can get FHA. 3 yrs after short sale OR foreclosure you can get FHA. The catch is: in your case even though you are nearly 1 year out of BK whatever you do to your property NOW ie: short sale or foreclosure, even though the debt is discharged, will add time to when you can buy again. ie: expect to add ANOTHER 3 yrs on to the time you can buy again after title transfers out of your name either through short sale or foreclosure. I know it totally SUCKS, if the debt is discharged it should be from BK discharge. Another way to screw us/punish us for being naughty consumers and filing BK and not keeping our underwater homes!!

Please note this is using conventional lenders, ie: banks. Not private lenders or hard money loans.

[jmanford]

As for re buying, it will THREE years from foreclosure OR short sale. The only benefit you have with a short sale is you might get it done a little sooner than a foreclosure so the 3 year clock starts sooner. Sorry, the 3 years will start from when the house actually changes hands. In your case, the 2 years from BK won't matter, the banks will go off the 3 year foreclosure/short sale time frame for giving you another mortgage.

The only exception is if you stay current on your mortgage all the way through the short sale process, in that case, it is only 1 year from short sale.

Keep in mind, those are FHA guidelines, conventional financing has much longer timelines. Also, just because your are eligible, doesn't mean they will lend to you. If you have a lot of bad payment history on other accounts, they may still deny you.

If you can prove a hardship and extenuating circumstances you can get an FHA loan 2 years after a short sale.

[HHM]

If you can prove a hardship and extenuating circumstances you can get an FHA loan 2 years after a short sale.

True, but good luck finding a mortgage broker that has ever done one, let alone willing to do it. Hardship really means hardship, you better have been in a car accident or struck by lightening.

[jmanford]

what about a VA loan? Is that 2 years?

[Over our heads]

How about this. Our first and seconds show up as IIB, when I do believe that our lawyer filed the re-aff on the first (against our wishes, long story). Hubs then lost his job, and we technically did a short sale. The first was paid off in its entirety, where as the second got the shaft. Our CR shows only IIB, and nothing relating to a foreclosure/SS.

When does our clock start? Would it be from the file date, the discharged/closed date, or the day we signed the closing papers?

[BrokeOR]

Even after BK 7, Mom2three09 states that she is currently 2 months behind on her motgage.

Can I ask a really obvious question? Won't lenders look at this inability to stay current with a mortgage, even after discharging all the debt, and turn down a loan?

[HHM]

Even after BK 7, Mom2three09 states that she is currently 2 months behind on her mortgage.

Can I ask a really obvious question? Won't lenders look at this inability to stay current with a mortgage, even after discharging all the debt, and turn down a loan?

Yep. If there is poor payment history (especially after the BK), the various eligibility time lines won't matter that much.

[jmanford]

Even after BK 7, Mom2three09 states that she is currently 2 months behind on her motgage.

Can I ask a really obvious question? Won't lenders look at this inability to stay current with a mortgage, even after discharging all the debt, and turn down a loan?

Another obvious question, how would a lender find this information if the debts were discharged in BK. Subsequent late payments aren't reported on your credit report.

[HHM]

It's not that hard to figure out...after all...if the house is subsequently foreclosed upon after the BK.

Also, there are OTHER types of credit reports.

[jmanford]

It's not that hard to figure out...after all...if the house is subsequently foreclosed upon after the BK.

Also, there are OTHER types of credit reports.

I pulled all 3 of my credit reports and they show no late payments. My house is being short sold and we have a buyer under contract. If the sale goes through I don't see why we won't be able to qualify for another loan after 2 years. I was current on all of my payments up to my Chapter 7. There are no late payments ever on any of my reports. How deep are they going to dig? Is there a secret database out there that us consumers don't know about? If there is that's total BS.