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Author: aj485 Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 127262  
Subject: Re: Freddie Mac Bets AGAINST American Homeowners Date: 2/5/2013 12:17 PM
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it is still likely that this couple would have qualified to borrow shortly after the short sale even under the old rules, as they were [not] delinquent on the payments on their short sale home at the time of the sale.

Sorry, your attempt to change my statement to state that the couple was not delinquent on the short sale home when they sold it is contradicted by the article, which says:

Finally, they were advised to try a short sale, in which the house is sold for less than the value of the underlying mortgage. They stopped making payments on the big house for it to go through. The sale was finally completed in 2009.

If they weren't making payments on the 'big' (i.e. short sale) house, they were delinquent on it.

In addition, there is the timing cited in the article, which states that they bought the 2nd house in 2005, and 'carried two mortgages for 2½ years'. 2 1/2 years after 2005 would, at most, be sometime in mid-2008. Since the short sale didn't go through until sometime in 2009, they missed at least 6 months of payments - meaning they were delinquent on the loan.

Here are the Freddie Mac guidelines for seasoning of various derogatory events.

Thanks for the link to the current rules. Since the brokers that the couple has spoken to have told them that nearly 4 years after the short sale, they still don't qualify to refi their current home due to the short sale on their previous home, those brokers must have also concluded that the couple's short sale was due to 'financial mismanagement', as the other option of 'extenuating circumstances' would have let them qualify only 2 years after the short sale.

Do you have a link to what the old rules for qualifying after a short sale were in 2009, so we can see if a couple with delinquent payments at the time of the short sale would qualify for a mortgage?

AJ
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