Ingrid B. Quinn

NMLS ID #211652 Arizona, Loan Consultant


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Short Sale/Deed in Lieu Seasoning per Fannie Mae

MortgageTroubles
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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Life After Short Sale

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Over the past couple of years, Short Sales have become more prevalent. Banks have been more receptive to short sales and have opted to negotiate instead of foreclose. Several clients who have called to be prequalified have had a Short Sale in their recent past. They have asked me when they can get back into the buying pool again. The rules to obtaining a mortgage after a short sale differ depending on the type of financing a buyer wants to use for their next purchase.

CONVENTIONAL FINANCING

With a 20% Down Payment, a Buyer can purchase a home using Conventional Financing after a 2 year waiting period from the Short Sale date (which can be found on their final HUD settlement statement). With 10% Down Payment, a buyer must wait 4 years from their Short Sale.

FHA FINANCING

Using FHA financing, a buyer must wait for 3 years to have passed from the Short Sale date.

VA FINANCING

The waiting time with VA financing will be 2 years.

USDA FINANCING

USDA financing will be a 3 year wait from the Short Sale date.

It is a good idea to great prequalified with your lender from 6 months to a year out before you purchase another home. Many times there could be some credit repair work that may need to be done on your credit history to make sure that your credit score and history are reporting accurately.

Do you have a Short Sale experience you would like to share? Please comment or contact me at Ingrid.Quinn@cobaltmortgage.com or visit my website at http://www.cobaltmortgage.com/ingridquinn.