FHA hands down it's verdict on Short Sales
There are a lot of schools of thought but just last week, FHA finally laid out it's decision on how they will determine if a homeowner is eligible for FHA financing after a short sale. As I have said before, there are probably 10% of lenders that wil do this, the other 90% will not. Keep you eyes open as the lending industry is about to get more strict. My guess is that the 10% will likely cease to exist.
You should be careful to imply that this is somehow set in stone. There are way too many variables to risk ourselves in implying that our client "IS" going to get into a home in 2-3 years.
This mortgagee letter provides guidance to lenders and underwriters regarding borrower eligibility when:
- a previously owned property was sold for less than what was owed (short sale), or
- there is principal write down of indebtedness that cannot be refinanced into a new mortgage (short pay off).
Summary - FHA Guidance on Short Sales (Read More)
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Ted Canto
Sr. Mortgage Consultant
Academy Mortgage
