The other day, I was contacted by a couple who wanted to purchase a home. The husband has a secure, long-term job with a substantial income. The husband received a promotion, but it required that he sell his home (which was held only in his name) and move. Because he was "underwater" on his loan (i.e. owed more than the house was now worth) he decided to do a short-sale.
Prior to the short-sale, the husband's credit score was well over 800. After the sale, it dropped about 50 points, still an excellent score. His wife's credit score remained over 800. With his secure, high-income job, great credit score, and almost 50% down payment, he thought they would be able to buy a new home.
He thought wrong. In trying to investigate this issue, I came across Fannie Mae guidelines which state that borrowers must wait four years after a short-sale, bankruptcy, or foreclosure before they can qualify for a new home loan. If they can prove hardship, then this waiting period may be reduced to two years.
Has anyone recently been through a short-sale, foreclosure or bankruptcy and then borrowed money to purchase a home? If so, I would appreciate hearing about your experiences. It could help a lot of people who may be trying to decide if one of these options makes sense for them.
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