Mortgage Blog

New Mortgage One Year After a Short Sale -Update - Expanded Options

October 25th, 2013 | Short Sales, Mortgage Loan Process, Traditional Mortgage, forgiven mortgage debt

It’s not news that it is difficult to get a new mortgage. The good news is the government and the markets are just beginning to recognize that the crisis was historic and not everyone who got caught should be permanently labeled a dead beat. I guess it’s fair to say the pendulum swung too far to the right with regard to underwriting standards and now we are beginning to see signs of flexibility. 

If you completed a short sale as a result of an economic event or catastrophic occurrence out of your control that can clearly be documented you may be eligible for a new mortgage in as little as one year. The loss of employment or household income beyond your control that lasted for more than six months is a perfect example. In this scenario, provided circumstances were out of your control versus elective, and you can demonstrate economic recovery, you may be eligible for a new mortgage loan with a minimal down payment after one year.

This is not for the classic strategic default scenario. The guidelines for this scenario are very specific and a fancy cover letter trying to contrive a real hardship that may have gotten you out of a bad investment with a short sale of an underwater property won’t qualify.

This is a nice, relatively new, development that will help many people renew their quest for homeownership again once they get back on their feet financially. The economy has been growing at a snails pace and unemployment has been a pervasive issue for many. If you endured the crisis and solved the mortgage problem with your lender with a successful short sale, under eligible circumstances you may be rewarded with additional flexibility to apply for a new mortgage in a shorter period of time. The alternative for the strategic default scenario or a lesser defined hardship is three years to a new mortgage with a low down payment or two years with a minimum of twenty percent down payment.

I think this is a very positive development. This applies to short sales, foreclosures, and even bankruptcies when the hardship meets the criteria.  If you would like to investigate your eligibility for a new mortgage one year after such an occurrence, please contact me for a free consultation.  

Blogging from the front line of the housing crisis.

George Omilan

Comments encouraged!  Would love to hear your thoughts.


Leave a Comment

Contact Us

Not readable? Change text.

Subscribe to Our Newsletter

Fields marked * are required
Email *




Jefferson Mortgage Group LLC

2536 Leeds Rd.
Oakton, Virginia 22124
FAX: 703-773-6946
NMLS: 935554

Located in Fairfax County, Virginia. Serving all of Virginia, Maryland & Pennsylvania. 


Jefferson Mortgage Group LLC is licensed in Virginia, Maryland & Pennsylvania.
Virginia State Corporation Commission License Number MC-5659 and the Pennsylvania Department of Banking & Securities #46259 
Maryland DLLR License #21586

An Equal Housing Lender

By refinancing the consumer's existing loan, the consumer's total finance charges may be higher over the life of the loan.

This material is not from HUD or FHA and has not been approved by HUD or any government agency.