FHA just released mortgagee letter 09-52, which lays out the guidelines under which borrowers who have previously completed a short sale of a property can qualify for a new mortgage using FHA financing.
The new mortgagee letter sets out criteria that pretty much mirror the criteria that we discussed here earlier for conforming mortgages after a short sale–basically, the short seller must not have gone into default prior to the short sale (or else at least 3 years must have passed since the short sale was concluded), and must not have agreed to a deficiency judgment or other condition that indicates that the short sale was not payment in full for the old mortgage.
The mortgagee letter does clarify, however, that for FHA financing, underwriters will also be looking at the reason for the short sale; if it was for convenience or financial gain, then the short seller is not eligible for subsequent FHA financing. The specific example given in the mortgagee letter of a short sale that disqualifies the short seller from getting subsequent FHA financing is if that seller then purchased a “similar or superior property within reasonable commuting distance”.
Note that this rule as currently worded technically prohibits a “for gain/convenience” short seller or a short seller who agreed to a deficiency judgment from ever obtaining FHA financing afterwards; underwriters that I have spoken to say that they suspect that the rule will be interpreted to mean that those cases will simply be treated as “default” short sales and have a 3 year waiting period before they are eligible for FHA financing, but that is all very uncertain at the moment.
Are you considering a short sale or loan modification? Your future plans to buy another home some day could be affected by how you structure your loan renegotiations now, so it’s important to have your lawyer, agent, and/or future lender in on the discussions to make sure that decisions you make now don’t come back to bite you a few years down the road. Contact us and we’d be glad to set up an appointment to discuss your situation, and refer you to the correct combination of agent and/or lawyer to help you with your short sale or loan modification.
Possibly related posts (automatically generated):
- How Long Do You Have To Wait After A Short Sale Before You Can Get A New Mortgage?
- Lease/Purchase: An Alternative For Buyers Who Have Recently Done A Short Sale
- Short Sale & Foreclosure Resources for Buyer Agents
- FHA announces assistance for “Chinese” drywall homeowners
- Bridge Loans Help Borrowers With Short Term Funding Needs
