How long do you have to wait (after a short sale/foreclosure) to get a new loan?

A reader of the blog recently asked, “How long would a person who had a foreclosure and/or a short sale have to wait to reacquire a good enough credit score to again be able to qualify for a loan in today’s lending environment?”

I received this info sheet from Sue Barry, a Branch Manager at iMortgage, that shows the required wait times for obtaining a loan after going through a bankruptcy, foreclosure, and short sales.

Check it out by clicking on the picture below.

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About Guy Johnson

I am a licensed Nevada REALTOR® living and working in Reno, Nevada. Give me a call at 775-722-4011. My team and I will be happy to assist you with your real estate needs.
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19 Responses to How long do you have to wait (after a short sale/foreclosure) to get a new loan?

  1. Avatar Derrick says:

    Thanks guy!

    Guy, could you give me your opinion on the dwindling active inventory we are experiencing? A quick MLS search of my area (180) show almost NOTHING for sale in the $150-$200k range. A choice of only 30 houses is hardly desirable.

    It’s pretty disturbing actually because I was pondering the possibility of purchasing another home in this area. Any guesses on how long we will have to wait for the banks to start giving us more inventory? lol

  2. Avatar Derrick says:

    fyi: I searched the available inventory using listingbook.

  3. Avatar Guy Johnson says:

    Derrick, I wish I had an answer for you. What you are experiencing is not unique. Ask any of my Buyer clients and they will tell you the same thing. Inventory levels are disturbingly low.
    A couple days ago I received a call from a prospective client wanting to purchase a house in the South Meadows area. Initially we did a search for properties listed for $150,000 and below. No active listings were returned. …as in ZERO available inventory. I removed the price constraint and found a total of only 34 houses available. Just to put that number in perspective, last month 39 houses sold in the South Meadows area. So, as you can see, the South Meadows area currently has less than one month of available inventory.

  4. Avatar Walter says:

    So I guess people will just have to rent. If all a guy can pay is $150K, and there are no houses available at $150K, I guess he rents.
    Out of curiousity, Guy, to what point did you “raise the price constraint” and found 34 listings?

  5. Avatar Reno Ignoramus says:

    We are pretty much where we were in the summer/fall of 2005 in terms of vanishing inventory. If I remember correctly, there were less than 600 houses for sale at that time on all of the NNMLS. Houses were going under contract within 30 minutes of coming on the MLS. Take away the extreme low end and the extreme high end and there was basically nothing. Many houses never even hit the MLS because the listing realtor only had to send out an in-house email to his or her colleagues and an offer appeared. Many people were making offers sight unseen. Buyers had to write letters to sellers explaining how much they would love to own the house and promising to keep feeding the squirrels. Sellers were insulted if they got an offer that was not for more than the asking price. The MIT chimpanzee could have made a lot of money being a realtor.
    And it was all juiced by voodoo money. JSP armed with his nothing down, interest only, no-doc, 2/28 teaser rate liar loan was out for bear. The Greater Fool Theory was in full display. Price really was no object. Just lie a little more. We all know how that turned out.
    It will be interesting to see what happens today without the voodoo money to enable food servers to borrow $400,000.

  6. Avatar Guy Johnson says:

    Walter, I removed the price constraint completely. In MLS Area #143 (South Meadows) there are currently 34 Active (non-pending) listings ranging in price from $159,000 – $427,995.

  7. Avatar Twister says:

    Guy has been talking about all the activity going on in South Meadows for at least a couple months now and people are starting to get it. The median price in this area actually bottomed out last summer and has been slowly trending up since June when it was $184K. I’m guessing it will be a little over $200K in the next detailed report and I’m wondering if Guy has that information yet. I’ve also noticed new home builders are busier then they’ve been in a while in South Meadows. New homes being bought will also move the median price up so some people who were looking at a short sale in this area may actually see a little equity return to their house with all the buyer demand.

  8. Avatar BanteringBear says:

    It makes sense that the median price in an area would go up when the lower end inventory disappears due to a bogus law which effectively stopped foreclosures. How could it not? The mix of homes sold is skewed towards the higher end. But, with it you’ll also see declining sales, and that does not portend good things, or signal a bottom. What it signals is a lack of affordable inventory and qualified buyers.

  9. Avatar Raymond says:

    Guy looks like that day of reckoning for realtors when commissions dry up because there are no houses for sale at prices people can/will pay may be at hand? At least for a lot of realtors?
    Bear makes a good point. Dwindling inventory is bound to move the median price up, especially when there are no low end houses for sale, but also it is going to drive the sales volume down.

  10. Avatar TestaDura says:

    Guy I was the guy who inquired about the waiting periods to qualify after a foreclosure or short sale. Thanks for providing the info.

  11. Avatar Cal says:

    Looks like we may not be seeing monthly sales volume up around 450 closings any more?

  12. Avatar Marmut says:

    There appears to be plenty of inventory at $ 1 million and over. Out of 95 listings, only 3 are pending, including a place with 13,000 sq. ft. for sale “as is” by the bankruptcy trustee who won’t even provide a seller’s disclosure report.

  13. Avatar Twister says:

    I dont disagree about the effects of the law on the median price and in fact I’ve pointed out before that it would cause prices to move higher as inventory dries up. Back in the January median price report, many were saying that prices would either stay about the same or continue to go down. I think homebuilders are responding to the growing demand for houses in South Meadows and so that should keep sales numbers going. It will also put more people back to work which will help the local economy. As far as qualified buyers go, I think theirs a lot of people who have been sitting on the sidelines waiting for prices to stop going down and who have the money. Also plenty of cash-paying investors.

  14. Avatar Guy Johnson says:

    You are welcome, TestaDura.

  15. Avatar Guy Johnson says:

    Twister,
    Regarding the median sold price in the South Meadows area (MLS Area #143) here are the last twelve months…

    month units sold median sold price
    Mar-12 22 $196,050
    Feb-12 39 $205,000
    Jan-12 34 $193,951
    Dec-11 46 $207,500
    Nov-11 51 $190,000
    Oct-11 28 $210,000
    Sep-11 37 $205,000
    Aug-11 50 $204,500
    Jul-11 30 $216,895
    Jun-11 54 $188,327
    May-11 40 $212,500
    Apr-11 32 $200,000
    Mar-11 46 $198,500

    * March 2012 data is for a partial month.

    Not sure how much one can infer from this — the relatively thin data sets provide greater variability.

    Note: The median home price data above is for the South Meadows Area of Reno, Nevada [NNRMLS Area #143]. Residential data includes Site/Stick Built properties only. Data excludes Condo/Townhouse, Manufactured/Modular and Shared Ownership properties. Data courtesy of the Northern Nevada Regional MLS – March 2012. Note: This information is deemed reliable, but not guaranteed.

  16. Avatar Twister says:

    Thanks Guy! Looks like it doesnt want to stray too far from 200K.

  17. Avatar Derrick says:

    “As far as qualified buyers go, I think theirs a lot of people who have been sitting on the sidelines waiting for prices to stop going down and who have the money. Also plenty of cash-paying investors.” (twister)

    That doesn’t mean anything if there aren’t any homes for sale.

  18. Avatar Twister says:

    Oh cry me a river you dumb ass! There are still some 900 active listings out there and if you want something in South Meadows then their are plenty of new homebuilders who will build you a damn house!

  19. Avatar Derrick says:

    LoL, thank you for proving my point dipstick!

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