You can buy a new home in Arizona with a past short sale, foreclosure or deed-in-lieu of foreclosure with Fannie Mae’s updated guidelines.  FNMA has recently changed its guidelines in regards to short sales and foreclosures effective July 1st 2010, to help those who fall into this category.

In an effort to help those who may have lost their home due to short sale or foreclosure FNMA is easing some of its guidelines to help people seeking to buy a new home in Arizona with a past Short Sale, Foreclosure or Deed in Lieu of Foreclosure.

Below is a chart published by FNMA detailing the time period from when one can be eligible after having a short sale or foreclosure of deed in lieu of foreclosure.  Those with extenuating circumstances will have a shortened time period but must be able to show proof of financial hardship.  This hardship will need to be documented and proved.  If you walked away from your home just because you were upside down will not qualify you for a financial hardship.  Things that may be allowed are, death, divorce, loss of job or medical reasons.

                                            Foreclosure Short Sale Deed in Lieu of foreclosure Arizona                                                                                                                                                                                                                                        

Here are a few parts of Fannie Mae’s annoucement:                                                                                                                                                              :

The terms “short sale” and “preforeclosure sale” are both referenced in this Announcement and have the same meaning – the sale of a property in lieu of a foreclosure, resulting in a payoff of less than the total amount owed, which was pre-approved by the servicer.

Fannie Mae is changing the required waiting period for a borrower to be eligible for a mortgage loan after a preforeclosure event. The waiting period commences on the completion date of the preforeclosure event, and may vary based on the maximum allowable LTV, CLTV, and HCLTV ratios (referred to herein as LTV ratios) and occupancy of the property.

Preforeclosure Event Current Waiting Period Requirements New Waiting Period Requirements
Deed-in-Lieu of Foreclosure 4 years
Additional requirements apply after 4
years up to 7 years  
2 years – 80% maximum LTV ratios4 years – 90% maximum LTV ratios7 years – LTV ratios per Fannie Mae’s eligibility matrix 
Preforeclosure Sale 2 years  
Short Sale No policy currently exists specific to short sales
Exceptions to Waiting Period for
Extenuating Circumstances
Preforeclosure Event Current Waiting Period Requirements New Waiting Period Requirements
Deed-in-Lieu of Foreclosure 2 years Additional requirements apply after 2 years up to 7 years 2 years – 90% maximum LTV ratios
Preforeclosure Sale No exceptions are permitted to the 2-year waiting period
Short Sale No policy currently exists specific to short sales

 

One thing to note: You can buy a new home in Arizona with past short sale, foreclosure or deed in lieu of foreclosure with a higher LTV if you wait a longer period of time or if you have an extenuating circumstance.

FHA currently extends a 3 year period for foreclosures and deed in lieu of foreclosures in Arizona to be able to qualify for a home.  FHA short sales offer a one year waiting period if you were current on your mortgage at the time of short sale however borrowers who pursued a short sale of their principal residence simply to take advantage of declining market conditions and purchase a similar or superior property within a reasonable commuting distance at a reduced price will not be eligible for a new FHA-insured mortgage (for three years)

For the full press release from FNMA on buying a home In Arizona with a past short sale, foreclosure or deed in lieu of foreclosure click HERE.  As a qualified mortgage specialist we assist clients with past foreclosures & short sales in Arizona.  For more information please call or email me.

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Foreclosed in Phoenix

 Foreclosed in Phoenix AZ. We are quickly approaching the era of the pre-foreclosed borrower.  We have probably all bumped into a person that has had a foreclosure but the probability running into someone coming off foreclosure is on an upward swing.

 Conventional, FHA & VA all have their guidelines on borrowers with foreclosures but since most of the business I run into these days is FHA.  I would like to go over a few problems one may run into.

FHA requires 3 years from the time the borrower has foreclosed on their home before they are eligible to buy another home.  Their can be extenuating circumstances but don’t count on an underwriting buying 95% of those well thought out stories of why you were foreclosed upon.  You may be okay if the main wage earner passed away or if the home was taken over through a divorce but otherwise you are probably out of luck.

 Keep in mind that FHA requires a 3 year period prior to the application being taken.  Loan officers need to understand that they can’t be pre-approving clients with a full-blown application and a contract in hand just waiting for that 3 year mark to pass before you can fund.  However, FHA does not specify that the borrower can’t go out and put get a contract in place before the 3 year mark.  This would require the loan officer to be a little savvy by being able to look at the borrowers’ credit profile and pre-approving them without actually doing an application.

 If your home was foreclosed on in Phoenix AZ  in the past 3 years it’ best to get your house in order now.  Having re-established credit is essential and setting up a game plan will make sure you are ready when that 3 year time period is up.  Fill out a quick application to see if you need help with financing after a foreclosure. At VIP Mortgage we can help you with your home financing.

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