Short Sales and FHA

Posted by on Feb 18, 2009 in Uncategorized | 0 comments

The rumors that FHA would finance homes immediately after a short sale with acceptable credit scores were swirling around like snowflakes on cactus.  FHA Mortgagee Letter 09-52, dated December 16th melted a lot of expectations:
1. To finance a home with FHA the borrower must be current at the time of the short sale
2. All mortgage payments and installment debt, (such as autos) were

made on time within the prior 12 month period.
3. Borrowers that were in default on their mortgage at the time of the short sale are not eligible for three years from the date of the sale.  If the defaulted mortgage was an FHA loan, then the eligibility period begins three years after FHA paid the claim associated with the sale.
There are other conditions and some exceptions.  Call us for more details.

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