Fannie Mae allows financing after short sale

Everyone has their opinion about the impact of a Short Sale on your credit and whether you can get a new mortgage after short selling a home.

To answer these questions we must refer to the current Guidelines for FHA, and Fannie Mae.

FHA has recently changed their rule so that if a borrower has short sold their home and all the payments were made on time, then they may be eligible for a new mortgage. Borrowers are not eligible for a new loan if they pursued a short sale to, take advantage of declining market and purchase at a reduced price a similar or superior property within a reasonable commuting distance. Motivation for new home purchase is subjective and requires careful consideration by the lender. Otherwise, if any payments were made late or you cannot demonstrate extenuating circumstances, then it is a 3 year period before new FHA financing can be considered.


Fannie Mae policy is pretty straight forward – It is a minimum of 2 years to re-establish credit after a short sale.

This is Fannie Mae’s Guideline:
Link to more information from Fannie Mae.

FICO & Short Sales

The FICO, has become a symbol of credit worthiness. Scores can range from 300-850 and is a statistical calculation which is based upon payment history (35%), credit utilization (30%), length of history (15%), credit type (10%), and recent credit checks (10%). Items stick around for seven years; bankruptcy for ten. Maxing out a card, a 30-day late payment, debt settlement, foreclosure (150 point ding) or bankruptcy (150-200 point hit) all negatively impact FICO. Those wondering whether or not a short sale hurts your credit score as much as a foreclosure, and apparently it depends on whether the borrower stays current on their payments and how the lender reports the sale (try for "debt repaid in full or settled or settled for less than balance").

Financing After A Short Sale

Real Estate RecoveryHome Loan Program

This loan program is designed for borrowers to SHORT SALE a home and immediately be eligible to purchase a new home!

Guidelines to Real Estate Recovery Loan Program:

• Primary residence purchase only
• Provide Short Sale Agreement
• Approved
• Motivation Letter
• Minimum middle credit score is 640
• No late payments during short sale process
• No late mortgage payment in last 12 months
• 3.5% Down Payment
• New home must be in different geographic area (new
  city and zip code)
  

Who benefits from the Recovery Loan Program?
Individuals moving closer to work
Homes with an increase in the number of dependents
Homes with a decrease in the number of dependents
Call with your motivation of new home purchase

Borrowers are not eligible for a new loan if they pursued a short sale to:
Take advantage of declining market conditions, and
Purchased at a reduced price a similar or superior property within a reasonable commuting distance

Call to find out how this loan can lead us all to real estate recovery.

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Thanks,
Troy Schuricht CFS Mortgage Corporation 7720 N 16th st Suite 325 Phoenix, AZ 85020 602-354-0537- office 602-241-9912 - fax

www.BankerAdvantage.com

Life After A Short Sale

There are many misconceptions about short sales. While this process has traditionally been a loss mitigation tool for the bank, it is quickly becoming a viable option for many borrowers that are "up side down" on their home.

One of the largest misconceptions is that you need to have 30 day late mortgage payments to qualify for a short sale. Most banks look for a reason as to why they would issue a short sale. Because every home owner has their own reason; loss of income, divorce, job transfer, over extended, added dependant, and so on, there are no set rules as to whom a short sale is approved for.

If home ownership is a goal of yours after a short sale, then maintaining timely payments (12 months before and during the short sale process) will be required in order to be consider for a new mortgage immediately following a short sale.

If you have been advised to miss payments to help qualify for a short sale, it might be a good idea to contact an attorney to at least discuss your situation. There are attorneys that that will give 1 hour consultations for free. They will tell you that you have no more leverage with late payments than you do with timely payments. If you are missing payments, now the bank actually has the leverage because you have given them the legal right to foreclose on you should the short sale negotiation fail or take longer than anticipated. It is a good idea to have attorneys negotiate the short sale.

Three things to think about as you move forward with the possibility of a short sale. 1) Do you have a goal to own a home again? 2) Are you being advised to miss payments? 3) Do you have a real estate attorney that can give you advise on legal ramifications of a short sale(Realtors provide real estate advise)?


For more information for financing a home after a short sale please contact:

Thanks,
Troy Schuricht
CFS Mortgage Corporation
7720 N 16th st Suite 325
Phoenix, AZ 85020
602-354-0537- office
602-241-9912 - fax
http://www.bankeradvantage.com/

Qualifying Your Renter

Author: Troy Schuricht
URL: http://www.communityfirstfinancial.com
October 8th, 2008

What Make A Good Renter?
Is a good renter someone with great credit, or large deposit or maybe high income? The approach landlords take in qualifying their renter could be changing because of the housing crisis and the large number of foreclosures.

The main objective of renting your home should be to have a qualified renter that will pay rent on time and take care of the home to some degree. Large deposits can maximize renter’s responsibilities to the care of your home, but what can be done to help minimize renter’s late pay or simple nonpayment and evictions.

The qualifying approach I encourage landlords to take is one similar to underwriting a loan. The question that everyone should ask themselves before renting their home. Can my renter make the payment on a consistent basis and how? This question is always answered by employment. There are a number of ways to increase the odds of finding a good renter just by looking at their employment.

Time on the job- The length time at the current employer is the first thing you should look at. If a potential renter has been employed for a number years this helps build a case that consistent income can help provide for timely rental payments.

Proof of income - Not only knowing where your renter works, but knowing exactly how much he makes is very important. It is not out of the question to ask for the last two paystubs and last year’s W2’s. While this may seem extreme, you have answered two critical questions. Does your renter really work and how much do they make.

Debt to Income Ratio - While pulling credit can give you an idea of credit score repayment history, how are you going to judge individuals that have gone through foreclosures and bankruptcies? Sometimes a bad borrower is a bad borrower and you need to decline them for your rental, but in today’s market place you will find more good renters with bad credit than ever before. My suggestion is to look at credit, income and employment and determined a debt to income ratio. This will illustrate whether they have sufficient income to cover their rent and debts.

This process is very similar to qualifying for a home mortgage. It is up to the landlord to develop their own guidelines as to what is acceptable to their market place. This is a very simple process to help increase the odds of a good renter - check employment, have proof of income, and determined debt ratio.

Five Reasons Start Investing in Real Estate Again

Just like any other financial market real estate continually cycles through its highs and lows. There can be great debate on whether the market as a whole is at its bottom, but there is a growing consensus that many markets have hit bottom and now is a great time to start investing in real estate.

Here are five fundamental reasons to start investing today.


1.Price: The sales price in almost every market has dropped substantially. When your combine the effects of short sales, foreclosures and bank owned properties with an already saturated market this makes for a real steal for those that have a good game plan and care due diligence.

2.Inventory: Inventory is at an all time high in most markets, which only contribute to the falling prices, but also helps with selection. Investors should not only look at the sale price and appraised value, but they should look very care full at the rental market in which they are selecting a home from. Some times passing on a little equity to capitalize on a strong rental market can have both short term and long term benefits, also known as cash follow.

3.Interest Rates: Current economy conditions have pushed interest rate down to historical lows. Investors that are considering long term holds will benefit the most as interest rates and inflation increase over the next few years so will the rents.

4.Seller Expectations: Most sellers including banks are now working hard than ever to move their properties. This not only translates into lower sells price, but more concessions. Sellers are now willing to pay closing cost, pay to help buy down the rate, or help pay for repairs.

5.Renters: As more and more individuals foreclose on their home the rental market will continue to increase. There are a number of individuals bought the wrong home at the wrong time for the wrong amount and that led them to be upside down on their house. Many of these home owners have and will continue simply foreclose. These new renters that have great income can and will be able to afford larger rental amounts.


Keep in mind every market has a bottom; it is up to you to do the due diligence that leads to a successful real estate transaction.

Model Home Center Realty Agent Joins Forces with Teacher A+

Kim Pickens and Model Home Center Realty team up with Community First Financial and Teacher A Plus Home Buying Program adding more value and creating support for our teachers.

Kim's niche is working with homeowners who may be potentially over leveraged and behind on payments and have exhausted all options of keeping their home. You may possibly be facing a Foreclosure situation and may have lots of questions and don't know who to turn to. So let me help by answering those questions with a no obligation consultation in my office.I specialize in helping those clients with a Short Sale Listing. Each situation is unique. I would market your home as usual while asking the lender to take less than what is owed on your property and I wold prepare a short sale packet to submit to your lender so we can find you a buyer and be able to sell your home even if you can't afford commissions and closing costs.
We look forward to her support and advisment of teacherson short sales and other real estate transactions.

Go to www.teacheraplus.ning.com for more information.