When Can I Buy A Home Again After Foreclosure or Short Sale?
One of the concerns a consumer has after experiencing a bankruptcy, foreclosure, or short sale (referred to as a “preforeclosure sale” by Fannie Mae) is the ability to obtain credit to purchase another home. Fannie Mae has updated its credit guidelines. This legal article summarizes those guidelines.

Q 1. How long is the time period after a foreclosure before a consumer can be eligible to obtain credit to purchase a home?

A Five years from the date the foreclosure sale was completed.

Additional requirements that apply after 5 years and up to 7 years following the completion date are as follows:

. The purchase of a principal residence is permitted with a minimum 10 percent down payment and minimum representataive credit score of 680.

. Purchase of a second home or investment property is not permitted.

. Limited cash-out refinances are permitted for all occupancy types pursuant to the eligibility requirements in effect at that time.

. Cash-out refinances are not permitted for any occupancy type.

(Source: FNMA Announcement 08-16, 6-25-08 )

Florida has one of the top foreclosure rates in the country, and mortgage fraud is one of the issues at the heart of the matter. In order to revive Florida’s and the country’s economy, a multi-agency approach to combating mortgage fraud is necessary. It is a serious area of concern for all of us, but particularly for agencies that oversee the real estate industry professionals and are responsible for protecting the public.

I was so pleased to receive Attorney General Bill McCollum’s letter this week, which sought our help-and the help of other agencies-in creating a statewide mortgage fraud network. He recognized the need for a more coordinated effort to combat mortgage fraud and reached out to all involved.

This past Wednesday, I represented the department at a summit called by the Attorney General, which included the Florida Department of Law Enforcement, the Office of Financial Regulation’s Division of Insurance Fraud, the Florida Chiefs of Police Association, the Florida Sheriffs Association, the Florida Prosecuting Attorneys Association, and the Florida Bar.

The Attorney General felt that Florida was “in a state of emergency” as his office has received more than 5,000 complaints about mortgage fraud, credit repair and debt relief services. Everyone at the table acknowledged the seriousness of this problem and committed to this organized effort to share information in a more consistent and uniform manner.

Many of the agencies in attendance already work together in an informal manner when investigating mortgage fraud. Our role at DBPR is to investigate cases that involve alleged violations by license real estate sales associates, brokers or appraisers. The criminal cases are referred to the local or state law enforcement organizations. The Division of Real Estate will pursue the administrative charges, and the department will prosecute them before the Florida Real Estate Commission.

As a result of this meeting, members formed a work group that would focus on three issues with an emphasis on how to collaboratively approach each issue. The issues are:

1. To establish a centralized intake system that will serve as a clearinghouse for citizen complaints.
2. To identify better ways to educate the public about mortgage fraud and how to file a complaint.
3. To create a triage system to determine the offense type and coordinate the agencies that would be involved in investigating the offense.

The overall goal of this committee is to create a system where mortgage fraud complaints are quickly investigated by the proper authorities, and each agency works with other agencies as a team.

I fully support the Attorney General’s effort to combat mortgage fraud, and I can tell you that at DBPR, we have and will continue to tackle this serious issue head-on.
Charles W. Drago
Secretary

Department of Business and
Professional Regulation

When financing a property in today’s real estate market, the ability to get finance in the first instance, and the interest rate charged will all be a reflection of your credit score.

recent research shows that over two thirds of Americans have errors and other unverifiable information on their credit reports. These errors could be dragging down their credit score and in many instances result in credit denial. Odds are very good that your credit score is actually lower than it should be. The most unfortunate thing is that it is more than likely that you will be yet another one of the many millions of Americans who will continue to suffer with an unfair credit score because you will are not prepared to take the necessary action to repair your credit.

Most Americans want to believe that the credit reporting system works. That generally speaking people earn their bad credit by their irresponsible actions and that there is nothing they can do about it but let time take its course. But study after study shows the credit reporting system frequently does not work. This is why the Fair Credit Reporting Act and other consumer protection legislation give you the right to do something about it,the right to make sure your credit score as accurate as possible and consequently to ensure that you have the highest credit score possible.

So why is it that, even though everyone has the right to dispute the negative items in their credit reports, very few people actually ever do? It certainly isn’t be because they don’t understand the importance of a high credit score. After all, it doesn’t take a genius to figure out the benefits of a good credit score when it can be the difference between paying $2,500/month and $1,8000/month for the exact same house mortgage, or the diffence in car payment, insurance premiums and credit card interest rates.

The reason people do not repair their credit is usually a mix of apathy and lack of understanding of the credit reporting system as a whole, and a lack of understanding of the actions that can be taken. Lack of knowledge is generally a very costly excuse! Too many people assume the credit reporting system is some official government bureaucracy with an extensive system of checks and balances designed to ensure the safekeeping of their credit history. This couldn’t be further from the truth.

The credit bureaus at the center of the credit reporting system are not official organizations. Instead, they are massive, for-profit corporations that collect personal information from your creditors and make money by selling this information in the form of your credit reports, to anyone that wants the information.

So how do they ensure that this information is correct? If a creditor reports something that is incorrect, how do the credit bureaus make sure it doesn’t end up on your credit reports?

The answer to both of these questions, is they don’t. Your creditors report information, the credit bureaus record it, and for most people, that is the end of the story.

Nobody at the credit bureaus or in the government is going to make sure your credit reports are accurate, or even care if they are. The way the credit reporting system is set up, there is only ever one person who will bother to check up on your credit reports – and that person is you. You are ultimately the most important piece of the credit reporting puzzle.

Making sure your credit score is where it should be is your responsibility. Repairing your credit reports is a task you will have to initiate procatively because no one out there will do it for you.

It is your right and your responsibility to dispute the questionable negative items in your credit reports and the sooner you do so,the better. You can work to repair your credit on your own or you can enlist the help of a credit report repair firm like Credit Justice Services.

So regardless of Whether you attempt to repair your credit on your own or with the help of a credit repair expert, by taking an active role in the credit reporting system, you can ensure your credit score is as good as it can be and by doing so you will have an advantage over the millions of people out there with bad credit who haven’t taken any action to do something about it.

For more information visit: www.creditjusticeservices.com