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Sellers With Previous Foreclosure or Short Sale: Access to Mortgage Financing

Homeowners who had experienced a foreclosure or short sale are starting to return as homeowners, although access to financing is posing a constraint, according to information in the August REALTORS® Confidence Index Survey report.

  • About 23 percent of respondents reported working with a buyer who previously experienced a foreclosure or short sale since 2005.
  • About 46 percent of responding REALTORS® reported that these buyers they worked with could not obtain mortgage financing.
  • In reference to these buyers who did not obtain mortgage financing, 65 percent of respondents reported that the reason was related to the previous foreclosure or short sale.

Jed Smith, Managing Director, Quantitative Research

Jed Smith is Managing Director, Quantitative Research with the National Association of Realtors®. He has worked on real estate issues for the past 20 years, providing input on a variety of housing, commercial real estate, tax, and planning issues. Recently he has been involved in several international studies.

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Comments
  1. Ken

    Is there a point when foreclosures and bankruptcy’s are so prevalent that the credit scoring bureau’s no longer affect your credit as harshly as in the past.

  2. It would be interesting to hear mortgage lenders chime in here. While it clearly does not directly state so, this article might seem to suggest that it may not be possible to obtain a mortgage loan after a short sale or foreclosure.

    Could a mortgage expert please speak to the seasoning requirements necessary to qualify and other factors, such as income, reserves, down payment requirements and any other relevant considerations, which might make it possible for someone to qualify for a loan after these unfortunate events?