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  1. #1

    Denied For Having Two Past Short Sales

    I would very much appreciate anyone's comments and expertise regarding our attempt to refinance our jumbo loan on our primary residence;
    We have good credit (725) plenty of reserves (about 120k in savings, checking, IRA) and make over $220k consistently yearly, as reported on our tax returns through our retail store business. Our current loan balance is $662,000, and our home appraised last year at 1.7m. We have no credit card debt, no auto loans, and our debt to income ratio is about 26%.

    Problem is, we have two short sales on our past record from income properties. The last short sale closed escrow October 2010.
    I have a letter of explanation for the short sales which explained the past hardship we faced. (We had sold our business and were holding the note. The new owner defaulted on the payments to us in 2008, resulting in a 70% loss in our income) The loans on the short sales did remain unpaid for many months, however, we have not been late on any accounts since (over 4 years). We have many other accounts including our primary mortgage in which we have never been late.
    I had attempted to refinance recently but was turned down. The reason given was the fact that we had two, as opposed to one, short sales. The loan representative I had worked with was quite frustrated as he thought it would be an easy approval based on our financials, the amount of equity, and no late payments since the short sales.
    At this time I would be grateful to hear comments on whether this is consistent in the industry. Do we simply have to wait until the 7 year mark when the short sales are removed in order to refinance ? Or, are there some lenders that would see the above facts and accept us as clients.
    Thanks so much for any comments or suggestions.

  2. #2
    Yes, on a jumbo 30 year fixed mortgage you would be hard pressed for 5-7 years. However, there are lenders who will do it on a 5 year or 7 year fixed ARM loan. If you need cash now or a lower rate, it may make sense and then refi again in 5 or so years into a 30 year fixed when the time is expired.

  3. #3
    Thank you for sharing your situation and this is very familiar to me. Since you're 4 years beyond the short sale we can help with the refinance. Our jumbo products conform to Fannie/Freddie guides on short sales which are a 4 year seasoning period. We can also confirm with our underwriting department prior to moving forward with an appraisal so that you don't spend any money out of pocket before we know we can do the loan. Feel free to e-mail me when you have a free moment.

  4. #4
    I stand corrected. Thanks for your input Erik.


 

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