I recently attended my first trustee sale on the King County courthouse steps. The house next door to us, that has been vacant for a couple years was scheduled to be auctioned. My husband and I were curious as to who might be purchasing the property and I’ve always wanted to see what happens at a foreclosure auction.
A “boomerang buyer” is the nick-name given to people who lost their home due to foreclosure or a short-sale during the Great Recession, who are “back” buying a home again. Realtytrac reports:
In 2015, the first wave of 7.3 million homeowners who lost their home to foreclosure or short sale during the foreclosure crisis are now past the seven-year window they conservatively need to repair their credit and qualify to buy a home. More waves of these potential boomerang buyers will be moving past that seven-year window over the next eight years corresponding to the eight years of above historically normal foreclosure activity from 2007 to 2014.
Hi Rhonda, I completed a short sale in Sept 2012, looking to repurchase. I know that Fannie Mae just extended their post short sale repurchase guidelines to a waiting time of 4 years. What other options do I have? I have enough for downpayment and FICO around 720ish. Thanks!
If you’ve had a bankruptcy, short sale or foreclosure, there is a waiting period that must take place before you can start the mortgage process. Wait periods vary depending on the type of derogatory event and the mortgage program. This reader’s excellent question is from an article I recently wrote about FHA’s “Back to Work” program.
We will reach our 1 year mark on January 30. Can we do anything before then to get the process started or do we have to wait until January 31?
I’m pleased to inform you that I just received a memo from our management stating that we are accepting HUD”s guidelines for the “Back to Work” program.
HUD’s “Back to Work” guidelines allow people who had a foreclosure, short sale or deed in lieu of foreclosure because of a significant loss of income and/or employment during the recession, to buy a home again quicker than the standard wait period of three years (for FHA).
UPDATE Sept 9, 2013: I just received a memo from our management and we are doing FHA’s “Back to Work” program for home buyers who meet the criteria.
HUD released Mortgagee Letter 2013-26, also referred to as “Back to Work” featuring enhanced guidelines for home owners who lost their homes via short sale or foreclosure due to financial difficulties. “Back to Work” shortens the required wait periods for borrowers wanting to buy a home again. From ML 2013-26:
Hot off the press! I wrote my latest Guide Book for people who have had a short sale or foreclosure and are considering buying their next home. The media has coined these home buyers as “boomerang buyers” because many are returning to buy a home again.
If you know someone who has had a short sale or foreclosure in Washington state and who is considering buying a home again, I hope you’ll share this book with them.
Check out my other guide books at the Mortgage Porter Library.
If you have had a short sale, foreclosure or a loan modification and are considering buying your next home located anywhere in Washington state, I’m happy to help you with your next mortgage.
Many home owners who were unable to refinance and did not qualify for special programs like HARP opted for a loan modification (or loan mod). A loan mod is when the existing mortgage terms are adjusted or modified, in most often cases to reduce the mortgage payment.
To be clear, I am not in the “loan mod” part of the mortgage industry. My focus is on helping Washington home buyers and home owners with mortgages for purchasing a home or refinancing their mortgage. With my mortgage practice, I do come across home owners who have had a loan mod and they are often surprised to learn how it may impact their odds buying a home.
Many lenders view a loan modification, if done for reasons of financial distress, as a “pre-foreclosure” or short sale.
A lot will weigh on the borrowers credit report. Lenders will look to see how the loan mod was reported to the bureaus. For example, some lenders may have added language to the credit report such as “PAYING UNDER PARTIAL AGREEMENT” or “LOAN MODIFIED…” which indicates a loan modification has taken place. Lenders will weigh if the borrower had late mortgage payments, how late the payments were and how recent the last late payment took place.
It’s also possible that the loan mod may not prevent you from buying your next home depending on your circumstances and how the loan mod was reported to the bureaus.
If you’ve had a loan modification in the past few years and are considering buying your next home, you will want to connect with a mortgage professional as soon as possible to see what your options are.
If you are considering a loan mod, please review this information from Washington State DFI. Another great website for you to check out if you are a Washington state homeowner in distress is www.homeownership.wa.gov.
If you are considering buying a home located in Washington state, I’m happy to help you. Worse case, if you are not able to “buy now” we can work on a plan together so that you’ll be in a better position in the future.