Alternative financing can help after a foreclosure


Q: My husband and I (both retired; he is 70 and I am 68) went through bankruptcy in the hope of not losing our house. We were discharged from bankruptcy in December 2009. We owed $219,600 at the time, but the house was only worth about $115,000. However, (our lender) refused to work with us with either a principal modification or some other type of help, even though we got a lawyer and went through mediation.

We lived in Mountain Falls in Pahrump and they were still building houses in our particular part of the neighborhood and selling them between $117,000 and $145,000 at that time. Therefore, no one was interested in buying ours. We eventually decided on a deed in lieu of foreclosure and signed paperwork in mid-February of 2012. We then rented the house back for a few months from Fannie Mae until we could find a rental. We physically vacated the house on June 29.

It has since been sold, but I do not know the date. I estimate somewhere in August or September.

My question is how long do we have to wait before we might look at buying another house? Are there any time periods involved? Our current rental contract ends in June 2014, at which time we would have to either rent again or purchase.

We are slowly building our credit back, have only a car payment and owe about $3,000 on three credit cards. We will probably be able to put $10,000 down, but don’t know what that would buy us, if anything. Any information you cold provide would be appreciated.

— Janet B., Pahrump

A: The good news is there are options for people in your situation.

Every situation is different. So you may want to contact a qualified local mortgage professional for more information.

To better address your question, I contacted Rick Piette, who owns Premier Mortgage Lending in Las Vegas and specializes in loan programs for homebuyers who are looking to buy again after a foreclosure or short sale.

His company is one of several in the Las Vegas Valley that have started offering these alternative financing programs.

Here’s what he said: “We have a nontraditional loan program that is tailored toward those borrowers who may have recently lost their homes due to foreclosure or short sales. We realize that this unprecedented economic downturn has forced many of us to make the tough decision to walk away from our mortgage obligations.

“Many people who have experienced a short sale or foreclosure think that they don’t have any option other than rent for at least two or three years, but more realistically at least five years. But this isn’t true.”

Piette said options like his company’s “Another Chance Nevada” loan program make it possible for buyers like you to buy a home after a short sale or foreclosure and take advantage of what many believe are still attractive home prices.

He said his program connects people who have experienced a short sale or foreclosure with private and institutional portfolio lenders who offer 15- or 30-year, fixed-rate loans at interest rates that are typically higher than current mortgage rates for traditional mortgage loans.

Full-documentation guidelines are followed and a down payment of at least 20 percent is required, he explained.

He said the down payment can come from personal funds or can be obtained as a gift from family members. Borrowers can close within 30 days from the time the loan is approved and can refinance the loan at any time without penalty.

I generally agree with Piette that local real estate prices are on the way up and that the recent recession and tight lending standards have made it more difficult for otherwise qualified buyers to get a loan to buy their own home.

Dave Tina is the 2013 president of the Greater Las Vegas Association of Realtors and has worked in the real estate industry for more than 35 years. GLVAR has more than 11,000 members. Email questions to ask@glvar.org. For more information, visit www.lasvegasrealtor.com.

 

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