One of Life’s Greatest Joys

The American Dream refuses to go away quietly in the night.   The aspiration for home-ownership has survived even the dismal recession whose tentacles began to appear in 2007 and a few of which linger to this day.   One of our lawfirms’ great celebrations occurs when a short sale client returns to buy their first home after selling their upside down residence.    We are up to 3 now who have orchestrated purchasing a new home immediately before the negative credit impact of the short sale delayed their ability to qualify for a mortgage.   Having a resourceful mortgage loan officer is very helpful in accomplishing the shortsell and purchase all in the same month strategy.

We have lost count of the short selling clients who have returned just after 24 months to buy new homes!

In recognition of the importance to the national economy of allowing former homeowners to re-enter the purchase market, the FHA has further loosened its guidelines for qualifications for credit applicants with a short sale in their credit report.

“Recognizing that any number of events may have impacted a borrowers’ credit rating, the Federal Housing Administration (FHA) believes that such catastrophic event does not mean they are not financially stable or unable to make a mortgage payment.”    If you were unlucky enough to be caught in the 45%+ loss of equity or to lose your job as a result of the recession, that alone will not prevent you from acquiring a new mortgage.    The key is never giving up, never losing hope, and finding a way to restore income stability to your life.   For certain, that can be easier said than done. But at least the new standards provide a back door for loan qualification that can circumvent the damage to the credit rating caused by the recession and the ensuing loss of jobs and loss of homes.

The key for short sellers to qualify is to be able to show how their setback was temporary and “if they have substantially recovered from that situation and maintained a positive credit history for at least 12 months” they may qualify under the new FHA rules for a mortgage.   Check out the breakdown on the new rules in this article in EXAMINER.COM.

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