What is the status on FHA waiving its 3-year waiting period for foreclosure, bankruptcy and Short sale

Hi! There are different rules for the circumstance. Per your request, here are the guidelines: BANKRUPTCY CHAPTER 7: allowed w/ 24 months seasoning from date of discharge and when good credit has been re-established. ** Exception to that rule is when bankruptcy was due to extenuating circumstances, you have exhibited an ability to manage financial affairs AND the reason for the BK is not likely to recur. Otherwise a person whose BK has been discharged less than 12 months is not eligible (except on noncredit qualifying streamline refinances). BANKRUPTCY CHAPTER 13: Allowed one year from pay-out period to show that your pay performance has been satisfactory and all required payments have been made on time AND the court gives written permission to enter into a mortgage transaction. HOWEVER, if the Chap 13 was discharged, you have to wait two years from discharge date. NOW....Short Sale: you're not eligible for a new FHA loan if you pursued a short sale for either of these reasons: 1) to take advantage of declining market conditions and 2) to purchase at a reduced price a similar or superior property within a reasonable commuting distance. SHORT SALE OF A DELINQUENT MORTGAGE OR AN FHA INSURED MORTGAGE: If your short sale was on an FHA loan OR on a loan that was delinquent you have to wait three years as it is treated just like a foreclosure. SHORT SALE OF NON DELINQUENT MTG: there are parameters to meet however there is a waiver to the 3 year waiver period for this if you meet those requirements. Requirements: 1) no late payments in 12 months prior to short sale (this means on the mortgage AND installment or revolving debts too) 2) subject property not located in same geographic area as the property on which the short sale was completed (for new purchases) 3) proceeds from the short sale serve as payment in full; the existing note holder cannot come after you for any loss on the balance 4) cannot have a previous foreclosure or bankruptcy. FORECLOSURE: Three year waiting period at minimum since date of foreclosure completion. LOAN MODIFICATIONS: a modified mortgage is also treated like a foreclosure and there are three year waiting periods on those. **** In all cases, your new application for mortgage cannot be taken until the appropriate time periods have elapsed. Questions, you can email me or give me a call KIMBERLY.LAWSON@FPFMAIL.COM or 888-659-3848 Thanks, Kim Lawson First Priority Financial Ohio LO.004495.000 NMLS:5601

Kilawson gives a great deal of information and I have to agree with what she has said. With repect to Short Sales, you may wish to read this Mortgagee Letter as it is guidance to lenders http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/files/09-52ml.pdf I also suggest you start conversations with a local lender that is authorized to write loans in your state.

Thank you for the responses; however I understand the current information provided. The question relates to an article (via Lender 411) that stated that within the next 75 days FHA is considering a policy change, loosing mortgage guidelines by waiving the traditional "waiting period" that follows a credit damaging event. Home buyers who have undergone a BK, Foreclosure, or Short Sale will able to purchase homes "immediately if this change takes effect (updated 9/13/2012)

It has been widely reported that FHA will waive the waiting period for certain "extenuating" circumstances. The problem is that FHA does not make loans, they only insure them. Of all of the lenders that do make the loans, I have yet to see one that has made the exception. ~ Bert Carpenter, The LoansA2z team of NOVA Home Loans ~ Licensed in California and Arizona ~ NMLS 40586 ~ www.LoansA2z.com ~ 888-889-9950