My buyers had to do a short sale a little over 2 years ago due to job loss. Since then they have scrimped and saved and we were assured by our lender that 2 yrs after the short sale we were okay to do a conventional loan with 20% down. Credit was run and it showed a short sale. So per the lender we were good to start shopping. Wrote an offer on a short sale, got it accepted and then the lender ran the buyers through DU Underwriting. According to the lender, there is a glitch in the DU Underwriting software.
Du shows my buyer had a foreclosure. Being told it is happening to other people but neither my lender (Imortage) nor bank reporting (Wells Fargo) nor my inhouse lender know how to "fix" it.
Buyer could lose his new house that he and his wife have worked so hard to get. Anyone run into this?
Know of any fixes out there? Or is this a class action lawsuit waiting to happen?
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Ok, first things first things first: Did you, at any time, receive a Notice of Default (NOD) or Lis Pendans? This is when the lender files a default and starts the foreclosure process. Run your credit. If either of these things happen, it's game over, regardless of whether or not you actually lost the home through a foreclosure. All creditors will count an NOD or Lis Pendans as a foreclosure, regardless of if you had one or not.
It's probably not the short sale itself, but one of these, but you never know.
www.josephalfe.com
I got my issue fixed, I opened a credit rescore order wiht our credit services, they had Experian call Bank of America over the phone and Experian just asked BofA if there was a foreclosure, they said "No" and Experian said "Thank you" and within 24 hours I was able to update my credit report and went through DU no problem.
Hello Sara..
I am presently having the same issue. After reading your posting I called Experian and they gave me the old run around... When you refer to ordering a rapid rescore from your "credit services" ? How do I go about ordering one? or can you recommend the "credit service" you used to obtain your rapid credit rescore? Pls. post or you can shoot me an e-mail at yadiradelacruz@yahoo.com any info and greatly appreciated!
Diane, I rec'd your question.. What a nightmare.. You'd think that congress would take measures to address this problem because this has affected a large group of people and Experian and Chase have done nothing to fix this. I will tell you where I'm at in my process, a week ago I spoke to a Mortgage broker and he told me that there was a couple of things he could do to help my situation. "One option would take a couple of day and if that didn't work then he said it would take about 45 day" but didn't tell me how or any details about the options? After 3 days he told me that he was able to get me approved in the Fannie Mae DU system? I was like great! but since then I have left him 2 messages since and he still hasn't gotten back to me, hmmmm?? I will keep you all post on the outcome. My 2 yr short sale anniversary is not till 2/11/13, I'm thinking it's because of this. Nevertheless, I have to wait til the following day to seek pre-approval.
Yadira, I hope it works out somehow. Our 2 years was 8/12 and the following date we tried and pulled credit, and ran DU and that's when this mess started. The DU came back with "Foreclosure" on Chase. We have since been battling it out and finally got Experian to update credit. This is what the lender office sent me yesterday:
. Settled or settlement accepted typically trigger that response. The rule for foreclosures is 7 years but short sale can be done after 2 years with 20% down and DU (automated) approval. It is not a something that we can have manually underwritten, we need the automated approval/accept.
Now feeling like there is no more I can do unless I can get the Chase CO deleted. We may have to wait until this August which will be 3 years and have to go FHA loan and have to pay PMI! Which is what we were trying to avoid! I'll keep you posted if something changes and God gives us a miracle :)
Diane...
I just wanted to get back to you as promised. I closed today on a new home after having the same issue. I held my breath throughout the entire 30 days, but today I signed and received my keys. I used a company called Primelending out of AZ, the mortgage planners name is Jeremy House. I just wanted to share the info with you, you may do what works best for you. I just wanted to update you as promised. Good luck! Yadira
Hello Diane,
According to my Realtor shorts sales can no longer be labeled as CO (Charge Off). I have not looked into it in detail, but I submitted a dispute to have the CO changed. Seems like you tried it all and I may be reinventing the wheel. In any event, once I get a hold of the Mortgage Broker that claims he got me approved In DU and if it in fact it's true, I will inbox you his info.
Hello Everyone! As promised I said I come back if my loan was approved. I am happy to say that as of today I closed on my new home. I used a company called Primelending (Jeremy House) out of AZ. I ain't even going to lie, this team was great! My interest rate was a little bit higher due to my short sale two yrs ago and a have a credit score below 720, nevertheless, my loan was approved and I received my keys today. Pls. feel free to inbox me with questions. Yadira! yea!!!!!!!!!!
Thanks! The law changed as of 7/2011 where banks can no longer report a short sale on your credit. Its California Legislation Code 580e. Unfortunately for us ours took place 8/10 and is not retroactive.
I am in California
I am happy to hear that!
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