Disparaging Credit-What to do now?

This subject has become more commonplace in our real estate market.   The impact on the housing industry is significant following the mounting number of short-sales, foreclosures and bankruptcy filings.  The major players ( Fannie, Freddie & FHA) have made the requirements more stringent to deter individuals from abandoning there homes.

One of the most important things to do first is reestablish GOOD credit.  Some time will have to transpire before you will be allowed to purchase.

Here are some timelines as a guide.

Fannie Mae                      FHA

Bankruptcy-Chapter 7/11          4 years                                      2 years
Bankruptcy-Chapter 13             2 years discharge date          2 years discharge date*                                                                   4 years dismissal date
Multiple Bankruptcies                5 years**                                   2 years***
Short sales/Deeds in Lieu/      4 years                                       3 years****
Preforeclosure                                    “                                                    “
Foreclosure                                  7 years                                       3 years
* Borrower may qualify sooner if one year of payout period has passed with no late payments and the borrower has written permission from court.
**If more than one filing within the past 7 years.
***From most recent discharged bankruptcy.
****If current on all debts for 12 months prior to sale they can get FHA loan immediately following short sale.
Data courtesy of Guarantee Mortgage.  Each persons situation is unique and time frames may be different.
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