Could I Get Another Loan To Purchase A Foreclosure While I’m Doing A Short Sale On My Original Home?

A short sale is a term used in real estate where the a home or other property is sold for less than the balance owed on the mortgage. In the case of a short sale, the lending institution and the debtor agree to terms where the loan balance is discounted and the lender will accept the proceeds from the sale usually, though not always, to fully satisfy the debt. This is done through the lender's "loss mitigation" department and is done during time of financial hardship on the part of the debtor. This is normally done to prevent a foreclosure, but only if it's in the lender's best interest, i.e. it is their best chance of getting the most money back out of the deal. Natalia Osorio Editor of the "Loan Modification Foreclosure" website -- http://www.LoanModificationForeclosures.com -- pointed out; “…Because a short sale occurs due to financial hardship and it will show up on a credit report as "mortgage debt not paid in full", it is highly unlikely, though not impossible, tha
t a person could receive a loan to purchase another home. Although it does not typically have the negative impact that a foreclosure or bankruptcy would have, it will still strongly affect a credit score and the ability to qualify for credit, especially another mortgage…” There is no specific question on the federal loan application referring to short sales, but it will ask about delinquencies, and the debtor will still need to fully disclose to the lending institution all information regarding real estate they own or have owned that would affect their ability to qualify for the current loan being applied for. If the debtor is completely honest about their situation, there is no remaining delinquency from the short sale agreement, and they have a good debt-to-income ratio, it's possible they may still get approved. If funding through a conventional lender is not an option, the potential buyer may still have the option of a hard money loan or a loan from a private lender(
such as a friend, family member, or other source). “…A hard money loan is an asset-based loan secured by the value of a property. It is similar to a traditional mortgage, but usually the interest rates and fees are higher, it is provided by a private lender, and will usually only cover up to 70 percent of the market value of the property. The advantage to this type of funding is that credit score is often not a large factor, if at all, and in the case of purchasing a foreclosure home, the 70 percent may cover the entire cost of the home if it's purchased below market value…” N. Osorio added. Further information about how to get professional assistance with a mortgage loan modification by http://www.LoanModificationForeclosures.com

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