Ingrid B. Quinn

NMLS ID #211652 Arizona, Loan Consultant


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Short Sale/Deed in Lieu Seasoning per Fannie Mae

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New Fannie Mae loan changes on the horizon could affect you! If you’ve recently had a short sale or deed-in-lieu of foreclosure (DIL) and are looking to purchase a home again, here’s what you need to know:
Fannie Mae announced that on August 16th of this year there will be changes to regulations. For several years now, Fannie Mae has allowed buyers that previously were involved in a pre-foreclosure hardship (short sale, or deed in lieu), to buy again using Conventional financing in as little as 24 months with a 20% down payment and a minimum 680 credit score.
After August 16th, this early purchase programs is being retired, and replaced with longer waiting period, but with much less strict down payment and credit score requirements. Buyers that experience a short sale or deed in lieu of foreclosure are able to buy again using Conventional financing after a four (4) year waiting period.
From what we understand, it appears that after the four (4) years from a short sale or deed in lieu, that you can qualify using the standard Conventional qualifying requirements of a minimum 620 credit score, and 5% down payment.
Exceptions: If a homeowner can prove that the short sale was due to an extenuating circumstance such as job loss and can provide strong documentation, then the waiting period may still be reduced to two years.
There are still options other than conventional conforming programs to assist buyers purchasing a home prior to 4 years. FHA & VA financing have shorter waiting periods; 3 years for FHA financing and 2 years for VA. Also, there are portfolio products available where a time limit does not exist but terms of that type of a loan are significantly less favorable than previously described programs.
If you have questions or comments, please feel free to contact me. Visit http://www.cobaltmortgage.com/ingridquinn or email me at Ingrid.quinn@cobaltmortgage.com.


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Where to Begin The Home Buying Process

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When you meet with a Realtor, they will want to get some information from you. First, they will want to know if you have been prequalified with a mortgage lender. Then the Realtor will want to find out the features you are looking for in your new home. What type of home are you looking for single family, townhome, condo, square footage, location and the biggest question, what’s your budget? Knowing all of this information up front gives you an advantage. The home buying process can be overwhelming, unless you put together a plan for success right from the start. Be ahead of the game and meet with a loan officer. He or she will give you a realistic idea of what you can afford and provide you with information about the process you are about to embark on.

Every buyer has a unique financial situation, credit score, job history, income, debt and financial goals. A mortgage lender will analyze your information at the beginning of your home buying process, maybe before you even meet with your agent and in turn this will give you the ability to focus on the properties that are the best fit for you. Today, it is not uncommon for people to have small hiccups through out the home buying process. Meeting with your mortgage lender before you begin looking at homes will put you in the best position possible. Some of the simplest things can become a deal breaker if they are not addressed in a timely manner up front.

Over the past few years, the home loan process has undergone major changes. Government requirements, coupled with new banking standards have implemented procedures to help avoid future housing troubles. Meeting with a lender should be step number one. You should be prepared to provide copies of tax records, W2’s, complete bank statements and pay stubs. Having your prequalification or pre approval (both topics are discussed in a previous blog) in place will help you to have the greatest success with an offer on a new home.

For more information about the home buying process or if you have questions or comments please visit http://www.cobaltmortgage.com/ingridquinn or http://www.scottsdalemortgageexpert.com.