buying a home with a short sale on credit
Having personally helped hundreds of sellers in distress close Sacramento short sales — to the tune of more than $65 million since 2006 — and put the entire horrid nightmare behind them, I often hear first-hand a seller swear she will never buy another home ever again. I caution with a grin, “Oh, I wouldn’t be so certain about that if I were you.” Those are often famous last words. If that were true and we all had long memories, women would never get pregnant a second time.
Believe it or not, there is joy and pain in a short sale. Over time, the pain and frustration from the short sale dissipates. Not only that, but the minute a short sale closes escrow, there is a huge sense of relief that suddenly appears out of nowhere. It’s almost as though the clouds stopped raining and tulips instantly bloomed in technicolor. You can hear angels sing. At least that’s what my sellers tell me.
Today, many short sale sellers are returning to buy a home after closing short sales. How soon can you buy after a short sale? The good news is if you have 25% to put down, you can buy immediately. Further, if you have completed a HAFA short sale without a Notice of Default nor late payments from the summer of 2013 forward — and if the lender reported your short payoff correctly as PAID IN FULL — you should be able to buy immediately under any financing program, including FHA with minimum down.
But FHA also has implemented its own Back to Work program for sellers who have “Paid in Full for Less Than Agreed” reported on their credit reports and who experienced an economic event, which allows a repurchase within one year. That’s pretty incredible as compared to the lengthy waiting times from the past. It used to be 7 years, then 5, then 3 years, (2 under Fannie Mae).
See, with time, lenders finally come around. I suspect they had to eventually because short sale sellers are not like foreclosure recipients. Short sale sellers are responsible people who struggled to do the right thing. They have a conscience, generally, and do unto others as they would have them do unto them. That’s a special breed. And these people deserve a second chance. I’m thrilled to see home loans available for them, without a big scarlet S hanging around their necks.
If you would like more information about buying again after a short sale, call Dan Tharp at Guild Mortgage, 916.257.1470 or email him at firstname.lastname@example.org. Then, call this Sacramento real estate agent, and we’ll get you started on looking at homes to buy: Elizabeth Weintraub, 916.233.6759.