Banks are qualifying clients with previous short sales

Banks are qualifying clients with previous short sales and are looking to re-enter the home purchase market. As the market and approval guidelines change on a weekly basis Stu and Misty will always put you in touch with the proper mortgage professional. But we thought this was some good news worth sharing.

Borrowers are considered eligible for new FHA financing if:

1.  The proceeds of the short sale serve as payment in full (lien extinguished in full – no lien/loan to be subordinated),
2.  Existing mortgage and all installment debts were current at the time of sale:
   
   1. All mortgage payments due on the prior mortgage were made within the month due for the 12 month period preceding the short sale.
   2. All installment debt payments were made within the month due for the 12 month period preceding the short sale.
   3. Borrower had insufficient equity in the home based on the value at time of short sale. This can be evidenced with short sale correspondence between the borrower and lender.
3. New financing not meant for similar home purchase with a depreciated value in the same proximity/neighborhood as the borrower’s current home.
4.  Borrower to provide a reasonable explanation if the new home is less than 25 miles or longer in distance from the borrower’s prior home.