What is the difference between a Short Sale & Foreclosure?
One of the most frequently ask questions is, "What is the difference between a foreclosure and a short sale?". Let's take a few minutes to explore this question.
Foreclosure: A homeowner who loses a home to foreclosure is ineligible for a Fannie Mae-backed mortgage for a period up to 7 years with some exceptions based on extenuating circumstances. See: efanniemae.com
Short Sale: A homeowner who successfully negotiates and closes a short sale will be eligible for a Fannie Mae-backed mortgage within 2 years.
Foreclosure: An investor who loses a home to foreclosure is ineligible for a Fannie Mae backed mortgage for a period up to 7 years with some exceptions based on extenuating circumstances. See: efanniemae.com
Short Sale: An investor who successfully negotiates and closes a short sale will be eligible for a Fannie Mae-backed investment mortgage within 2 years (see page two for LTV ratios).
Foreclosure: With any Mortgage Company on any future 1003 application, a prospective borrower will have to answer YES to question C in Section VIII of the standard 1003 that asks “Have you had property foreclosed upon or given title or deed-in-lieu thereof in the last 7 years?” This will affect future rates.
Short Sale: With any Mortgage Company there is no similar declaration or question regarding a short sale. FHA – If current at the close of short sale, a homeowner may apply for an FHA loan immediately. If homeowner is late before close of short sale closing, will be eligible for FHA loan after 3 years.
Next time we will review how this effects credit scores. Stay tuned.
To Your Success!
Donna Tashjian
www.DonnaHelpsHomeowners.INFO
616-803-9456
One of the most frequently ask questions is, "What is the difference between a foreclosure and a short sale?". Let's take a few minutes to explore this question.
Foreclosure: A homeowner who loses a home to foreclosure is ineligible for a Fannie Mae-backed mortgage for a period up to 7 years with some exceptions based on extenuating circumstances. See: efanniemae.com
Short Sale: A homeowner who successfully negotiates and closes a short sale will be eligible for a Fannie Mae-backed mortgage within 2 years.
Foreclosure: An investor who loses a home to foreclosure is ineligible for a Fannie Mae backed mortgage for a period up to 7 years with some exceptions based on extenuating circumstances. See: efanniemae.com
Short Sale: An investor who successfully negotiates and closes a short sale will be eligible for a Fannie Mae-backed investment mortgage within 2 years (see page two for LTV ratios).
Foreclosure: With any Mortgage Company on any future 1003 application, a prospective borrower will have to answer YES to question C in Section VIII of the standard 1003 that asks “Have you had property foreclosed upon or given title or deed-in-lieu thereof in the last 7 years?” This will affect future rates.
Short Sale: With any Mortgage Company there is no similar declaration or question regarding a short sale. FHA – If current at the close of short sale, a homeowner may apply for an FHA loan immediately. If homeowner is late before close of short sale closing, will be eligible for FHA loan after 3 years.
Next time we will review how this effects credit scores. Stay tuned.
To Your Success!
Donna Tashjian
www.DonnaHelpsHomeowners.INFO
616-803-9456
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