Posts Tagged short sale
While walking this morning I noticed the house two doors down had a notice on the door: This home is owned by Fannie Mae.
I know, it’s all over these days. I’m sure many of you have had a neighbor lose their home recently, also. It’s sad. He and his family have lived there since 2004. This house is very cute and was cared for and loved by my neighbor. It was built in 1938 and has been thoroughly remodeled and the landscaping updated.
Like so many others though, he’s not losing his home because he bought more house than he could afford – living there for seven years is a testament to that – but because due to the economy he is earning much less than he even last year and he can no longer afford to pay his bills.
And he’s not becoming a renter. He, his wife and kids are all moving-in with other family and sharing expenses.
I guess I’m from a different school of thought about this recession. I am not from the school of “real estate and mortgage fraud brought down the country”. I’m from the school of thought of “Yeah, there was some fraud in the real estate industry, but the biggest cause of the bubble burst was the economy already being on a downward spiral causing loss of jobs which lead to people losing their homes and cars and other things.”
I feel my position is supported by the fact that it wasn’t only the mortgage industry that saw late payments and defaults. All sectors of the credit industry did: homes, autos, credit cards, etc.
Why did this happen? Well I’m no economist, but I can guarantee that the people really responsible for the mess we’re in have shifted the blame to those without the money and the microphone and are walking away scott-free and richer than they were in 2007.
So you’ve had to short sale your home. You’re worried the short sale will prevent you from buying a home again. Well, you may be in luck. Using an FHA insured loan you may be eligible to buy a home the very next day. Here is what HUD has to say about short sales and buying again:
…borrowers are considered eligible for a new FHA-insured mortgage if: 1) they were current on their previous mortgage and other debts at the time of the short sale and 2) if the proceeds from the short sale serve as payment in full.
We also stated that borrowers are not eligible for a new FHA mortgage if they pursued a short sale agreement to take advantage of declining market conditions, or to purchase another property at a reduced price.
Additionally, borrowers who execute a short sale while in default on their mortgage are not eligible for a FHA-insured mortgage for three years from the date of the sale.
Lenders, however, can make exceptions if the default was due to circumstances beyond the borrower’s control, such as the death of the primary wage earner.
So as long as you were current on your former mortgage and other debt, and not in foreclosure, than you are immediately eligible for an FHA insured loan.
Home sales in Utah were up in April, May and June of this year, partially because of the first time home buyer tax credit, but that expired in April and doesn’t explain May and June. What did keep sales high looks to be foreclosures. In fact, 18.6% of all homes sold in Utah from April through June were in some state of foreclosure.
A lot of buyers may not have been looking for foreclosures, but the average foreclosure is selling for 26% less than another home for sale that is not a foreclosure. This make them hard to overlook.
HUD, VA and Fannie Mae all have programs to purchase foreclosed properties with little or no down payment and lenient credit standards. Plus, buying a home at 20% t0 30% less gives you instant equity in a time that values are down.
Check-out the links in the Resources section of the sidebar for more information on these programs or give me a call.