No. of Recommendations: 2
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?

Print the post  


Useful Resources
Our Home Center has all you need to make buying and owning a home a great experience. Get or refinance a mortgage and much more!
Buying/Selling a Home FAQ

Mortgage Professor
Offsite resource for mortgage questions.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.