If you were current when your short sale is made you have every chance of buying a new home according to the new guidelines from the Department of Housing

from FHA guideline-

Borrowers are considered eligible for a new FHA-insured mortgage if, from the date of loan application for the new mortgage

• All mortgage payments due on the prior mortgage were made within the month due for the 12 month period preceding the short sale, and

• All installment debt payments for the same time period were also made within the month due.

Lenders are not allowed to approve  a new home purchase  if…

from the FHA guideline-

-Borrowers in default on their mortgage at the time of the short sale (or pre-foreclosure sale) are not eligible for a new FHA-insured mortgage for three years from the date of the pre-foreclosure sale. Lenders may make exceptions to this rule under certain circumstances.-

Another caveat is that if you are simply trying to take advantage of the market a new FHA insured mortgage will not be approved-

Borrowers are not eligible for a new FHA mortgage if they pursued a short sale agreement on his or her principal residence simply to
• take advantage of declining market conditions, and
• purchase, at a reduced price, a similar or superior property within a reasonable commuting distance.
Reference: For detailed information on converting existing principal residences into rental properties, see 4155.1 4.E.4.g

You can download the guidelines in a PDF format below here download FHA Guideline PDF

Date Range 11/1/2009 – 11/23/2009

Homes for sale  260

New Listings  66

Pending sales  55

Closed Sales This Week  2

Congratulations to 2  the new Buyers and Sellers that closed escrow this last week.

16345 LOS GATOS BL #49,
$510,000 Beds: 2 bed(s) Baths: 2 (1/1) bath(s) 1017 sq ft

115 WOOD RD, Los Gatos 95030
$2,900,000 Beds: 5 bed(s) Baths: 5 (4/1) bath(s)  4386 sq ft

A short sale transaction tends to leave everyone a little queasy.   No matter how well it is executed by your attorney or Realtor it all started with a little cold.   You have already taken a big dose of medicine just to come to terms with the idea of selling your home.  Now you need a good prescription following a better diagnosis.

After hiring a Realtor to make a diagnosis, be sure there are going to be relapses…lots of little relapses.  Lately, I have seen some that must have felt a little like the H1N1 virus.  The common relapses are multiple lenders, the HELOC problem, the dreaded HOA variables and the always troubling impatient buyer!

Too often ‘experts’ who tell you “everything will be fine”, fail to notice your home is in a neighborhood that has a managing HOA.   Easy enough to remember when it is a Condominium or Town Home community however, many Single Family Home neighborhoods are now ‘managed’ by an HOA.   This is where the cold becomes the dreaded Swine Flu.  In San Jose, nearly every neighborhood built in the last 10 years has some kind of HOA.

What’s the best medicine to protect you from the ‘Swine Flu Short Sale’?  First, be sure to hire an expert with experience that can be verified. This person will be able to diagnose your Short Sale and prescribe the best medicine.  I like to provide contact information of my recently satisfied clients as evidence of my prescribing qualifications.

A few things you will need to know:

1. How much is the HOA going to charge us to transfer the property?

2. Can they transfer?   Has the Builder and HOA agreed to terms of transfer?

3. Are you behind in dues payments?

4. If you are behind, what fees are accruing …daily, weekly or monthly?

5. Is the second loan a HELOC?

6. What are the chances of paying on a Promissory Note after the sale?

These are all unpleasant relapses and the prescription for each can be a negotiated factor if addressed early.  Like ‘an apple a day’ or taking your vitamins can keep you healthy, knowing these ahead of time could prevent a deadly relapse.  If not addressed they will ruin the chances for your approval of Short Sale.  Remember this the sale price approved will not change…Do you know what your second loan is?  Can a Default Judgment be filed?

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