Sacramento 4 Less Realty
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Repair Your Credit



Over the last several years there had been a dramatic drop in the value of homes in Phoenix, Scottsdale, Chandler, Gilbert, Mesa, Tempe and especially so in Queen Creek, Arizona. Since 2013 our real estate market prices have recovered back to where home prices were before late 2004 - through mid 2005 skyrocketing prices. Depending upon when you purchased your home, you may have equity in your home. Call me to tell you what your home is worth in today's market.

Homeowners who stopped making their house payments and face foreclosure are in one of three categories:

  1. they received notice of trustee sale and are now a Pre-Foreclosure and will be Foreclosed soon and/or
  2. they are attempting to Short Sale their home and expect the lender to agree to accept less than the full amount of the loan owed or
  3. are trying to give the home back to the Lender as a Deed in Lieu of Foreclosure. In all cases these homeowners should be aware the minimum time period to be able to reestablish their credit rating and be able to buy a home has been extended.


2 years - Homeowners who participated in a Short Sale may be able to reestablish creditand buy another home in as little as two (2) years after the completion of the Short Sale.

This time period can be as little as zero if the home owner continues to make house payments on time and the lender agrees to participate in the short sale due to extenuating circumstances such as a stroke victim living in a two story home who is unable to climb the stairs to get to the bedroom.

2 years - Homeowners who give their home back to their lender as a Deed In Lieu action to avoid Foreclosure may have to wait two (2) years from the date the home was transferred back to the bank to be able to reestablish credit and purchase another home with 20% down payment or four (4) years from the date the home was transferred back to the bank to purchase another home with as little as 10% down payment. Sometimes a Deed in Lieu is reported as a foreclosure. If this occurred you will want to have that corrected.

7 years - Homeowners who lost their homes through Foreclosure may be able to purchase another home 7 years after the completion of the Foreclosure.

In all cases, extenuating circumstances may reduce the waiting period.


Most lenders who originate home purchase loans sell their loans to investors in the secondary mortgage market to make a profit and to be able to make new home loans.

FNMA (Fannie Mae) was chartered by Congress to ensure a continuous supply of mortgage money. Fannie May buys loans originated by banks and mortgage companies to infuse them with cash to be able to make new loans. The mortgages that were purchased are held in their portfolios or repackaged into mortgage-backed securities to be sold to the public.

FNMA buys a lot of loans and specifies mortgage underwriting rules to be followed by lenders who intend to sell the loans they originate in the secondary mortgage market. In response to high default rate of borrowers, Fannie Mae has revised new loan underwriting rules.


... AFTER A FORECLOSURE ACTION - 7 Years minimum

FNMA has increased the mandatory elapsed time period to reestablish credit history after a foreclosure action from 4 years to 7 years from the completion of the foreclosure action.

In the event borrowers can demonstrate documented extenuating circumstances for the foreclosure action, the mandatory elapsed time is now 3 years, revised upwards from 2 years.

Additionally, after the required mandatory elapsed period the borrower may qualify for a loan with a minimum of a 10% down payment and a minimum 680 FICO score.


FNMA has established the mandatory elapsed time period to reestablish credit history after a pre-foreclosure (short sale) action is 2 years from the completion date of the short sale action.

Prior to this new policy there had been no set time period to reestablish credit after a foreclosure.

Timeframes for Reestablishing Damaged Credit Due to:



Deed-in-Lieu of Foreclosure

2 Years – 20% down payment

3 Years from completion

Pre-foreclosure or Short Sale

4 Years – 10% down payment

No Waiting Period due to
extenuating circumstances **

Foreclosure Sale

7 Years from Recorded Date

3 Years from completion due
to extenuating circumstances **

3 Years from Recorded Date

Bankruptcy – Chapter 7

4 Years from Discharge date

2 Years from Discharge date due
to extenuating circumstances**

2 Years from Discharge date

Bankruptcy – Chapter 13

2 Years from Discharge and
4 Years from Dismissal

2 Years from discharge and
2 Years from dismissal due
to extenuating circumstances**

1 Year of on-time payments

** Extenuating circumstances related to you losing your Phoenix home may reduce the time period you must wait before you qualify for a new home loan. In the meantime, work your way through your financial issues. You have suffered a setback, but you come back financially stronger than before.

Your future is going to be impacted by the experience and knowledge of the REALTOR® you hire to market your home, negotiate the terms of sale with the buyer of your home and then convince your Lender(s) to pay all your closing costs, all or some of the buyer closing costs and accept less the full loan payoff to close the sale.

Don't leave your future to chance. Hire an experienced REALTOR® and proven contract negotiator with years of negotiating experience in business and real estate to get your home sold and put this bad experience behind you so you can start fresh and get on with your life.

Sample Content Provided by Mr. Sam Elam at

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