Waiting Period after Short Sale or Foreclosure

One of the most frequently asked questions these days has to do with how long someone has to wait before they can buy a new San Diego North County home after experiencing a foreclosure, short-sale or bankruptcy. It can be vary depending on the type of financing one is trying to obtain.

VA financing is the most lenient. Typically, one has to wait two-years in all cases. Extenuating circumstances could reduce the amount of time before one could buy.

FHA is typically three-years in the case of a foreclosure or short-sale, two-years with a chapter 7 bankruptcy and one-year for a chapter 13 bankruptcy. Personally, I think FHA financing is the best option for most people.

Conventional financing is the most restrictive. Seven-years is usually the waiting period for a foreclosure but in some cases it can be only three-years. Short-sales are from seven down to two-years, depending upon the amount of the  down-payment. A chapter 7 bankruptcy is two to four-years with a chapter 13 being the same.

Information in the above article was provided by Cindy Choice of American Capital Home Loans.  Call to get Cindy’s phone number or email address.

Need more info about buying a San Diego North County home, contact Gary Harmon today.

California Foreclosure Rates

The chart below shows California foreclosure rates by county.  As you will see San Diego County and especially San Diego North County has done well when comparing it to the rest of the state.  Only 1 in 27  households have been foreclosed on in San Diego County compared to 1 in 10 in many counties.  If you are looking for a distressed home to buy, you might want to consider a San Diego foreclosure homes, short sales, REO’s or bank owned homes. 

If you are interested in finding  San Diego foreclosure homes or other distressed properties, contact Gary Harmon, your top North County Realtor.   See up to the minute San Diego North County homes market statistics here.

Ever wonder which lenders made the most bad loans, see San Diego Short Sale Lenders.

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Waiting Period after Short Sale or Foreclosure

How Soon Can I Get a Loan

One of the questions clients often ask me is “How long do you have to wait after you go through a short sale or a foreclosure to qualify for a new loan.  Although I do not do loans, I know the answer is “it depends.”   I hope the following information furnished by Dan Dobbs of American Commerce Mortgage will help answer some of your questions.  In addition, you should always consult your own tax advisor and attorney before starting a short sale or foreclosure on your San Diego North County home.

There is much “mis” information regarding the length of time borrowers are required to wait between the final date of the foreclosure / short sale and the date the new escrow opening.

Wait periods can be as short as 2 years or as long as 7 years.

What contributes to the confusion….are the additional “overlays” (additional underwriting criteria) for each specific investor.

Criteria are different for “conventional” loans vs. FHA/VA loans.

For both types…..what determines the “wait time” is your buyer’s (i.e. former “short seller”) circumstances at the time of the sale?

Specifically….what were the “extenuating circumstances” that can be clearly documented. (The “burden of proof” will clearly be on the buyer and there is USUALLY more than just ONE circumstance)!
Examples of extenuating circumstances are:

1) Job loss job in a specialized field and what caused the extended period of time to find a new job.

2) Significant health issues for borrower or close family member.

3) Death /illness of close family member PARTICULARLY if the victim is a signatory on the loan. (must provide medical records and/ or death certificate).
Strategic Defaults

Strategic Defaults

Buyers are NOT eligible for a new FHA- INSURED MORTGAGE ….if they pursued a short sale agreement on their principal residence simply to:

1) Take advantage of declining market conditions


2) Purchased at a reduced price…a similar or superior property…within a reasonable commuting distance.

In other words if your buyer engaged in a “strategic default”…they can kiss off any FHA financing for the foreseeable future.

Buyers seeking “conventional financing” who previously “strategically defaulted” currently have up to a 7 year wait period before they are eligible for financing.

For information on San Diego North County homes, contact Gary Harmon, your Real Living Lifestyles Realtor.

How Long Does a Foreclosure Affect Your Credit?

I am constantly asked  how long does a foreclosure affect your credit.   What can I do to get my credit back and buy a San Diego North County home?  The article below deals with foreclosures and a “notice of foreclosure.”

Having a foreclosure is not the death knell to your credit score, but it does make a big hit.  How long you have to wait to buy that San Diego North County home depends on the reason for the foreclosure and other circumstances. The general rule is that a foreclosure stays on your credit report for seven years.   A foreclosure is considered a major derogatory item.  Your credit score will start to suffer as soon as a “notice of foreclosure” is filed on your property.  The damage a foreclosure makes can vary, but it can be as much as 200 points.

Rebuilding After a Foreclosure

After your foreclosure, your priority has to be rebuilding your credit.  You have some time because Freddie Mac and Fannie Mae have strict rules on how long it will take before you are eligible for another North County home loan.  For example, at Fannie Mae, if you have a foreclosure with extenuating circumstances, such as a job loss, medical issues, or a divorce, you must wait about three years.   Same is true at Freddie Mac.  If you do not have extenuating circumstances, Freddie Mac, says the wait is five years.  If your home foreclosure was caused solely from your own financial mismanagement, you must wait seven years before you can buy that North County home.

Tips on Improving the Odds

If  you have been through a foreclosure there are things you can do to make lenders want to take a chance on you again:

  • Save money for your downpayment. 
  • Clean up your credit score by paying off or paying down your debts.
  • Establish a record on “on time payments”
  • Get your credit score as high as possible
  • Show stability in you job
  • Monitor your credit report.  Make sure paid off lines of credit and loans show closed.
  • Talk to a good lender

At Prudential California Realty, I work with some of the best lenders in the business.  My partner at HomeServices Lending, Curtis Fox, would be glad to take a free look at your credit and see what we could do to get  you into your next San Diego North County home sooner.  Contact Gary Harmon, your North County real estate expert.

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Free Foreclosure Search

Free Foreclosure SearchUse Foreclosure Radar, America’s favorite foreclosure search, to search for auction , pre-foreclosues, and Escondido foreclosures.  Start searching now with Free Foreclosure Search.  Please be patient it takes a few seconds to load the search map.

5 Tips on Buying Escondido Foreclosures

Know Where to Look

Current Escondido Homeowners

Current Escondido Homeowners

To be successful in the Escondido real estate foreclosure market you must know where to look.  Finding  the Escondido home listing the day it hits the market can be key.  You can find Escondido foreclosures and other San Diego County foreclosure homes using Free Foreclosure Search on this blog and on my main website, www.HomeInfoSanDiego.com.  You can find Escondido homes that have been foreclosed upon in the Quick Homes MLS search by looking for bank owned homes and also setting up a personal search on ListingBook. 

See Video “Search Like an Agent!” 

Get Help, Make Gary Harmon Your Escondido Realtor

It is ok to do searches for Escondido real estate foreclosures on your own, buy why not get free help.  Gary Harmon wants to be your Escondido Realtor and he is experienced in setting up searches and find the right Escondido home for his clients.  Do miss the next Escondido foreclosure opportunity, search yourself and have Gary Harmon also searching for you.

Be Prequalified by a Lender

Escondido homes in foreclosure and other great buys of San Diego North County real estate often sell the first weekend on the market.  To make an offer you must first find the right home and then make a quick offer.  With that offer your Escondido Realtor, Gary Harmon, must submit your prequalification letter.  Be prepared and have the letter ready by already having talked to Home Services Lending, one of Gary’s winning team members.

Write an Aggressive Offer on Your Escondido Home

Gary will be able to research the comparative sales in the area to give you a quick idea of where to make your first offer.  To be successful buying Escondido foreclosure home you usually have to pay full listing price or above.  Many Escondido foreclosure homes get multiple offers.  Banks may take the offer they feel is the strongest.  If you are thinking of making low offers and waiting for the banks to counter your offer, you will be waiting while others are being successful.  So, be mentally prepared to make a strong opening offer.

If you follow the five tips above, you will be successful in buying that Escondido foreclosure home.



Find Escondido Foreclosures Fast!

Free Foreclosure Search is no longer available.  August 31, 2015

Find Escondido foreclosures fast!  You can use the “yellow link” on the main part of this post to search for Escondido foreclosures using “Foreclosure Radar.”  Foreclosure Radar lets you search both by address or by map.  Search using Free Foreclosure Search.