There is a Lender Making Loans to Buyers a Few Months After Selling on a Short Sale

Real Estate Agent with Lyon Real Estate BRE #00697006

buying home after short saleI received an email yesterday from one of my short sale sellers who had closed an Elk Grove short sale on October 30th and bought a new home on December 30th, 2009. This was before FHA issued its new guidelines. The new FHA guidelines this year say FHA will approve a loan for a seller who sold on a short sale, providing the seller was not delinquent on the mortgage. I've been looking for a lender who will do this because none of my sources is funding such loans.

The client was excited to share the news, and added that he bought the home without an agent, using the help of a "sales associate." While I am not thrilled that the client was hoodwinked into believing he did not need to hire his own buyer's broker and therefore did not call me, I am super jazzed that he bought the home. His email made me realize that I need to be more diligent in letting my clients know that I can represent them if they want to buy a new home from a builder.

The last new home construction that I negotiated was a model home. Buying a model home from a builder is a bit complicated because those homes involve upgrades already in place. But builders in Sacramento are hurting financially and are willing to wheel and deal at the moment. Not only did this particular single woman home buyer get her model home at a terrific price, she also received all of the furniture for free. It pays to hire an agent, and it doesn't cost a buyer one thin dime.

The thing that struck a chord with me in my client's email was the fact a bank made him a loan 3 months after his short sale. This is what happened: Even though he was current on his payments to Wells Fargo, the bank made a notation on this client's credit report that the second loan was charged off. We tried to get that verbiage removed from the short sale approval letter, but Wells Fargo refused. After the short sale closed, Wells Fargo reported the loan as a charge off with a balance owing. The client called Wells Fargo and insisted that the loan should be reported with a zero balance because the debt was forgiven. So, Wells Fargo changed the reporting status to: Paid in Full for Less Than Agreed with a zero balance. After that adjustment, the client's FICO score jumped from 651 to 740.

This is why it's a good idea for sellers who do short sales to check their credit reports after closing. Another not-so-lucky client had Bank of America file a foreclosure against her after the loan was paid off as a short sale. And she was current on her mortgage payments when it closed. That was a real mess to untangle.

However, if you are thinking about buying a home after a short sale, and if your payments are current, you might want to contact Flagstar Bank and ask about an FHA loan. Flagstar is funding loans for buyers after selling as a short sale. The minimum FICO score required by Flagstar is 650.

Posted by

sacramento short sale agentcerfified hafa specialist


Certified HAFA Specialistelizabeth weintraub


equator certified platinum short saleequator certified platinum reo elizabeth weintraub

Elizabeth Weintraub reviews






Sacramento Real Estate Listings




Elizabeth Weintraub is an author, home buying expert for, a Land Park resident, and a veteran real estate agent who specializes in older, classic homes in Land Park, Curtis Park, Midtown and East Sacramento, as well as tract homes in Elk Grove, Natomas, Roseville and Lincoln. Weintraub is also a Sacramento Short Sale agent who lists and successfully sells short sales throughout the four-county Sacramento area with an emphasis on Elk Grove. Call Elizabeth Weintraub at 916.233.6759. Put 40 years of real estate experience to work for you. Broker-Associate at Lyon Real Estate. BRE License # 00697006.

The Short Sale Savior, by Elizabeth Weintraub, available with free shipping.

Photo: Unless otherwise noted in this blog, the photo is copyrighted by Big Stock Photo and used with permission.The views expressed herein are Weintraub's personal views and do not reflect the views of Lyon Real Estate. Disclaimer: If this post contains a listing, information is deemed reliable as of the date it was written. After that date, the listing may be sold, listed by another brokerage, canceled, pending or taken temporarily off the market, and the price could change without notice; it could blow up, explode or vanish. To find out the present status of any listing, please go to


Re-Bloggged 6 times:

Re-Blogged By Re-Blogged At
  1. Tim Krueger 03/15/2010 12:43 AM
  2. Joe and Molly Murphy 03/15/2010 01:04 AM
  3. Lenn Harley 03/15/2010 06:57 AM
  4. Ralph Gorgoglione 03/15/2010 07:12 AM
  5. Donald Bradbury 03/15/2010 09:16 AM
  6. Jorge DeLeon 03/15/2010 01:00 PM
Spam prevention

Accessibility option: listen to a question and answer it!

To submit the form,
drag the clock to the circle on the side.

Type below the answer to what you hear. Numbers or words, lowercase:

Real Estate General Information
California Sacramento County Elk Grove
ActiveRain Rockstars
Club Chaos
Lyon Realtors
Posts to Localism
Short Sales Specialists
buying home after short sale
short sale
elk grove short sale
single woman home buyer
buying new home
buying model home
elizabeth weintraub

Comments 71 New Comment

Justin Messer
Residential Loan Officer, USDA Rural Housing Loan
Supreme Lending- USDA, FHA, and Conventional Loans

Great information.  I have had folks that sold via short sale over two years ago and I could not get them approved because they had "foreclosure started" on their report.  They had one payment that was 30 days late.

March 16, 2010 02:03 PM
Bill Gassett
Metrowest Massachusetts Real Estate
RE/MAX Executive Realty

Interesting information about Flagstar funding loans after a short sale!

March 20, 2010 05:17 PM
Thomas McCombs
Century 21 HomeStar

I'd be interested to hear what needs to be in that hardship letter to allow a short sale without being delinguent. For example, would necessary but unaffordable repair expenses such as a roof, in an underwater home be a qualification?

March 22, 2010 09:51 AM
Anonymous #72

I keep hearing from lenders shortsales are foreclosures. I have a client that was up to date on his payments and shortsaled his home last year. Can anyone help me qualify him. He has 10% down maybe 20%.


I need a lender. Help.

I am in california.

email me if you can help.


May 20, 2010 04:28 PM
Margaret C. Taylor
St Marys/Calvert/Charles MD Real Estate Agent
Century 21 New Millennium MD

Thank you for the reminder.  I have heard this before.  It still depends on finding a lender.  Is Flagstsar the only one?

June 01, 2010 04:02 PM

Elizabeth Weintraub Sacramento Real Estate Agent, Top 1% of Lyon Agents

Put 40 years of experience to work for you
How much is my home worth?
Spam prevention

Accessibility option: listen to a question and answer it!

To submit the form,
drag the sunglasses to the circle on the side.

Type below the answer to what you hear. Numbers or words, lowercase:

Additional Information

Broker-Associate at Lyon Real Estate, midtown Sacramento office. Selling since 1974. Homebuying expert at Best short sale agent in Sacramento. Elizabeth sells homes from Galt to Lincoln.
Meez 3D avatar avatars games

Author Bio: Elizabeth Weintraub is a Sacramento real estate broker, author, home buying expert for, a Land Park resident, who specializes not only in older, classic homes in Land Park, Curtis Park, Midtown and East Sacramento but sells extensively from Elk Grove to Lincoln. Weintraub is prominently known as the #1 Sacramento Short Sale agent throughout the Sacramento four-county area. Call Elizabeth Weintraub at 916.233.6759. Put 40 years of real estate experience to work for you.