Reasons why you should do a SHORT SALE if you can't make your payments.
Many times, I see and work with seller clients in deep financial turmoil with their homes. I always have "put my foor down" so to speak and argue against them just letting their home go into FORECLOSURE. Often times, the clients are tired and worn out by the process and don't see any reason to sell the home when they will not get any money out of the sale.
The BIGGEST reason to do a short sale rather than just letting the home go into foreclosure is this - A short sale will help you to buy a home in the future and a foreclosure won't.
Bellow is an announcement from fannie mae I got from a Mortgage Broker earlier this month explaining the time frame to purchase for people who have lost their homes.
A PERSON THAT GOES THROUGH A FORECLOSURE HAS TO WAIT 7 YEARS TO BUY A HOME.
A PERSON THAT DOES A SHORT SALE ONLY HAS TO WAIT 2 TO 4 YEARS TO BUY A HOME.
Many of the people going through this unfortunate situation now will be able to make a comeback when they get their finances straight and get the job back that they lost because of the economy.
YOU NEED TO REALIZE THAT DOING A SHORT SALE NOW CAN SAVE YOU YEARS OF RENT PAYMENTS (throwing money out the window) LATER.
NOTE: THE EXTENUATING CIRCUMSTANCES SITUATION THAT IS MENTIONED IS ONLY WHEN A CUSTOMER CAN PROVE THAT THERE WERE MEDICAL REASONS FOR THE PROBLEM.
SEE BELOW,THE ANNOUNCEMENT FROM FANNIE MAE; Also if you are interested in selling your home in the Myrtle Beach area, Pawleys Island, Murrells Inlet Georgetown, ETC as a short sale... Please call Jake Lee 843-240-0431 as soon as possible! Sometimes, depending on circumstances, it may be too late! You can also visit www.JakeLeeRealEstate.com and click on the "Short Sales" tab to see an explainantion.
Announcement SEL-2010-08 Page 1
Announcement SEL-2010-08 June 23, 2010
Underwriting Borrowers with a Prior Foreclosure
A variety of foreclosure alternatives are available to borrowers who are having difficulty making
their mortgage payments. In Announcement SEL-2010-05, Selling Guide, Waiting Period After a Foreclosure
Currently, the waiting period that must elapse after a borrower experiences a foreclosure is
seven years. However, Fannie Mae allows a shorter time period – five years – if certain
additional requirements are met (e.g., minimum down payment and credit score, and occupancy
requirements). These requirements are being modified to remove the five year option. Unless
the foreclosure was the result of documented extenuating circumstances, which only requires a
three-year waiting period (with additional requirements), all borrowers will now be required to
meet a seven-year waiting period after a prior foreclosure to be eligible for a new mortgage loan
eligible for sale to Fannie Mae.
The additional requirements that apply to borrowers with documented extenuating
circumstances are also being updated to reflect a maximum LTV ratio of the lesser of 90% or
the LTV ratio per the Derogatory
Event
Current Waiting Period
Requirements
New Waiting Period
Requirements
Foreclosure Exceptions to Waiting Period for Extenuating Circumstances
Foreclosure Effective Date
This policy is effective for manually underwritten mortgage loans with application dates
beginning October 1, 2010. Desktop Underwriter Summary – All Waiting Period Requirements
The following table summarizes the waiting period requirements for all significant derogatory
credit events. See the Derogatory
Event
Waiting Period Requirements Waiting Period with
Extenuating Circumstances
Bankruptcy –
Chapter 7 or 11
4 years 2 years
Bankruptcy –
Chapter 13
Multiple
Bankruptcy
Filings
5 years if more than one filing within the
past 7 years
3 years from the most recent
discharge or dismissal date
Foreclosure Derogatory
Event
Waiting Period Requirements Waiting Period with
Extenuating Circumstances
Deed-in-Lieu of
Foreclosure
Preforeclosure
Sale
Short Sale
*****
Lenders who have questions about this Announcement should contact their Customer Account
Team.
John S. Forlines
Vice President
Single-Family Chief Risk Officer