Buying a house after a short sale or foreclosure?

One of the most common questions I receive from Realtors, Loan Officers, and Clients is what are the rules to buying a new home after a short sale or foreclosure with a previous property?

While rules are made to be broken and there may be other options for some potential homeowners, the standard guide is as follows:

Short Sale and Foreclosure guidelines for Fannie Mae, Freddie Mac and FHA

Clients re-entering the Housing Market

Fannie Mae – Freddie Mac

Foreclosure - 7 years
Deed-in-lieu/Short Sale: 2 years at 80% LTV (20%+ down payment required)

4 years at 90% LTV (10% down payment and mortgage insurance certified)

FHA –

Foreclosure: 3 years

Deed-in-Lieu/Short Sale: No waiting Period
If the borrower was current on their mortgage and all other installment debt for the 12 months preceding the short sale, the subject property is not in the same geographical area as the short sale and the short sale lender accepted the short sale as payment in full.

Deed-in-Lieu/Short Sale: 3 Years*

It is treated as a foreclosure if the borrower was late on the mortgage and other installment debt for the 12 months preceding and at the time of the short sale. In addition, if the borrower pursued the short sale to take advantage of the declining market or purchased at a reduced price a similar or superior property within a reasonable commuting distance.

NOTES:

Laws and guidelines change frequently as new policies and packages are introduced, so check with me for current updates specific to your situation.

Some institutions may underwrite stricter than the current published guidelines.

Time frames may be reduced if there is a documented extenuating circumstance beyond the control of the borrower, such as serious illness or death of a wage earner, and the borrower has re-established good credit since the foreclosure. This is an arbitrary decision by the lender and divorce, loss of employment, inability to sell the property and job transfer or relocation does not qualify for extenuating circumstances.

There are numerous other restrictions, criteria, and guideline credit overlays for a borrower re entering the housing market after a short sale or foreclosure.

You can learn more about loan eligibility at:

Fannie Mae: http://www.fanniemae.com/portal/index.html

Freddie Mac: http://www.freddiemac.com/sell/guide/

FHA: http://portal.hud.gov/hudportal/HUD?src=/topics/buying_a_home

Call for VA and USDA eligibility guidelines.

Reduced waiting periods may be available, although not common.

Craig Turley is a mortgage professional licensed in Arizona and California. Craig has over 20 years financial markets experience and you may contact him here.

Do you know your 2013 Federal Income Tax Bracket?

Most American Tax Payers are anxiously awaiting their 2012 W2s so they may begin the annual obligation of filing their tax returns.  

Fun.

You know what else is fun?  

How about taking a peak at expected 2013 Federal income tax brackets and marginal tax rates:

Forbes:

Rate	Single Filers	Married Joint Filers	Head of Household Filers
10%	$0 to $8,925	$0 to $17,850	$0 to $12,750
15%	$8,925 to $36,250	$17,850 to $72,500	$12,750 to $48,600
25%	$36,250 to $87,850	$72,500 to $146,400	$48,600 to $125,450
28%	$87,850 to $183,250	$146,400 to $223,050	$125,450 to $203,150
33%	$183,250 to $398,350	$223,050 to $398,350	$203,150 to $398,350
35%	$398,350 to $400,000	$398,350 to $450,000	$398,350 to $425,000
39.6%	$400,000 and up	$450,000 and up	$425,000 and up

Keep in mind that the tax rates listed in these tables are marginal rates. That means that you do not owe your rate on all of your income. For example, if you single, you earn $100,000 per year, you would not owe 28% on all of your income -- you would not owe $28,000 to the federal government. You would owe 10% of $8,925, 15% of $27,325 (the difference between the top and the threshold of the second tax bracket), 25% of $51,600, and 28% of $12,150.  (full story)

These rates do not include the roll back of the temporary payroll taxes for employees earning less than $110,100.  If you are one of the 160 million people this has impacted, you've already noticed the difference in your pay check. 

Kindly,

Craig Turley

Craig Turley is a licensed mortgage banker in Arizona and California based out of Scottsdale, Arizona.  All tax questions should be directed to your individual tax professional.

At Least the USA is not Greece, yet.

A boy aged 14 wrote: "The present is uncertain, the future looks nonexistent. When a country dies, so do its inhabitants.

As the the fiscal follies of the USA continue to mount, there is a shining example of a country which may have let things get past the point of no return. 

(excerpt from Greece:  A debt colony, shackled to its lenders)

In order to impose austerity measures, the government is already using undemocratic methods like legislative ordinances that bypass parliamentary control. But even that is not enough for Greece's saviours, who demand a further narrowing of democracy.

The Greek government has agreed not only to transfer all of the revenues from privatising public assets to a special account for servicing its debt. It has also agreed to transfer all of its budget surpluses up to 4.5 percent of GDP, and an additional 30 percent of any surplus beyond that! So even in the best-case scenario, in which Greece would have the fiscal resources to raise pensions and boost funding for the public healthcare system and public education, it will simply not be permitted to do so. There is no room for political decisions anymore.

It is not an exaggeration to claim that Greece is a debt colony now, shackled to its lenders. It is subservient to a trust of bankers, bureaucrats and neo-liberal fundamentalist politicians in northern Europe (and within Greece, too) who aim to impose their doctrine regardless of its apparent failure and the will of the Greek people.

Entire Story

Personally, you or I probably will not change the path of fiscal chaos engaged in by the folks in Congress.  However, we can take charge of our own personal debt load and not be shackled to our lenders.  Please feel free to contact me for an overall mortgage analysis including term reduction, debt consolidation and lower interest costs in your life.

Craig Turley is a mortgage banker with 20 years finance experience based in Scottsdale, Arizona.  He is licensed to conduct business in Arizona and California.  Contact Craig.

Tax Relief Act of 2012

Can you believe it has been 2 weeks since all the Fiscal Cliff grandstanding, fear mongering and threats?

If you are a regular wage earner, you will begin to see the impact of increased payroll taxes on a weekly, semi weekly or monthly basis.  This starts immediately.

 I've provided the entire "Relief Act" in the link below for the casual reader.  Enjoy.

Tax Relief Act of 2012.  (yes, they really used "relief")

Now, prepare for Debt Ceiling Crisis 2013.

I am not a tax adviser.  Any tax questions should be addressed with a professional tax adviser, not your mortgage guy.  If you have a mortgage question or a sports question, please feel free to ask me.  

Arizona Attorney General Warns of Mortgage Scam

Be careful when any organization or person requires you to pay up front fees.*   In Arizona, you may always check the validity of any offer for service with the consumer affairs division of the Arizona Department of Institutions.  

Mortgage Scam:

PHOENIX -- Arizona Attorney General Tom Horne says homeowners need to be aware of a mortgage scam being mailed out to many Valley homes.

According to Horne, a New York company called Fresh Start has been sending out a mailing that appears to be an official legal or government document.  

(full story)

Purchasing a new home or refinancing in Arizona or California?  Contact Craig for a professional review.