Have you wondered how buying a home after a short sale or foreclosure works? Since the housing market crisis, many people have found themselves selling their home as a short sale or they have been through a foreclosure. The majority of these former homeowners has either found living arrangements with family or friends or has been in a rental property since they could not buy a home after a short sale or foreclosure.
With the great interest rates and low home prices many of these people would like to buy their own home again but how does that work? Depending on the situation, they may qualify for a loan in as little as 3 years!
If someone was foreclosed on, FHA requires a 36 month waiting period and Fannie Mae or Freddie Mac require 84 months from the completion of the foreclosure.
If someone sold in a short sale, FHA requires a 36 month waiting period, Fannie Mae requires 72 months and Freddie Mac 48 months.
These numbers are general guidelines, there are extenuating circumstances, other types of loans and the time may vary from state to state. If it has been at least 3 years since the short sale or foreclosure was completed, contact a mortgage professional to see if you may qualify for a mortgage to purchase a home. In the meantime, work on your credit score, pay your bills on time and do not take on excessive amounts of debt.
The housing market is continuing its climb in the Twin Cities! September was the 15th month in a row of sales gains! The median sales price in September jumped 12.3% from last September to $174,000 and there was a 4.3% increase in the number of homes sold from September 2011. The number of homes for sale has also dropped for the past 20 consecutive months and is below 16,000 for the first time since December 2003.
The Minneapolis Area Association of Realtors also found that 30.6% of all new listings in September were short sales and foreclosures, the lowest level since June 2008. Prices on distressed properties were also up. Foreclosure prices were up 13.7% and short sales .8%. So the Twin Cities housing market is continuing its climb.
According to Freddie Mac, REO (bank owned homes) inventory is down from it’s peak. Back in 2010 at the peak, there were about 75,000 homes in their inventory and now they are at about 53,000, about a 30% decrease.
With the economy picking up and unemployment decreasing, foreclosures are slowing and there is less housing inventory on the market with more buyers so they are snapping up homes that do come on the market.
Some of the banks are also starting to work with the mortgage holders as soon as a payment is missed in an effort to keep them in their home rather than go through a foreclosure.
This has all resulted in a smaller inventory of REO properties.
The Minnesota Homeownership Center has released its data on the number of preforeclosure notices received by foreclosure counselors in the Homeownership Advisors Network for the second quarter of 2012. Notices received dropped 17% from the first quarter of 2012, reaching their lowest point since the law was enacted in late 2008. In the second quarter of 2012, 9,995 preforeclosure notices were received which is 17% fewer than the previous quarter, and 25% fewer than the second quarter of 2011. The Twin Cities metro area also experienced a 16% drop in the number of notices.
While numbers were mostly down, Carver County experienced a 13% increase and the City of Minneapolis a 45.6% increase in the number of preforeclosure notices. Overall the number of notices is down but there still have been 22,101 preforeclosure notices sent out so far this year.
If you are experiencing difficulties paying your mortgage or need to sell but owe more than what your home is worth, take a look at my short sale and foreclosure page for more information.