One of the things I am doing for folks who have been victims of this real estate market is helping them get back in shape to purchase a home in two to three years. Lots of people obtained purchase mortgage loans in 2004-2007. Many people have lost their homes and now they will need a bad credit mortgage.

The federal government should allow people who have lost their homes due to unforeseen financial hardships to repurchase homes now. This program could enable people to put 10% down of their own money, no mortgage insurance and provide documentation that substantiates the likelihood of income continuity to be able to continue to make their mortgage payment. If HUD, allowed something like this, not only would it help fix the economy, but it would stabilize the Sonoma County Market. As we know purchase mortgage rates today are the low 4’s. HUD could put in place a risk based pricing model that would enable people to purchase homes post foreclosure and interest rates for folks with these types of situations would be 1% over market rate.

Until such a day happens, getting a mortgage after short sale or foreclosure for people will remain difficult.

So who do you use the get the best mortgage?My team and I are working with them to get their credit scores rebuilt for free, and helping them get qualified to purchase a home again in three years. These folks will get to experience all the joys of homeownership again and they’ll be in a better position to afford their home.

Presently, a foreclosure or short sale needs to be 36 months from deliquency and the borrower needs to prove that the financial hardship happened to due circumstances beyond their control. Read the next tip on Finding a Bad Credit Mortgage Loan Sonoma County, CA.

Update:

FHA mortgage loans-36 months from foreclosure or from short sale, whichever is the most recent date as reported on the most recent copy of the credit report

USDA loans-36 months from foreclosure or from short sale, whichever is the most recent date as reported on the most recent copy of your credit report.

Conventional loans-two years post short sale, with 20% down and a green light from the Fannie Mae or the Freddie Mac automated underwriting tools, speak to a mortgage lender today to see if you can get qualified to purchase a house and get a second chance on homeownership.

If you have recently had a foreclosure, or short sale, that does not necessarily preclude you from the ability to purchase a house. Contact scott.sheldon@naf.com to see what challenges you need to overcome to purchasing a house.