There are many people who face problem when they are eligible to repurchase a home because their past short sale credit shows up as a foreclosure. Earlier this year, U.S. Senator Bill Nelson of Florida and the Consumer Financial Protection Bureau (CFPB) started work on a credit code problem. This credit code problem was showing an error code that was not allowing past short sellers from getting a mortgage. The past short seller credit was showing up as a foreclosure that resulted in a denial of mortgage to eligible past short sellers.
This error had a great impact on the housing market because nearly 2.2 million past short sellers were blocked from entering the housing market again. This resulted in a huge loss for both the housing market and the home buyers.
The CFPB and U.S. Senator Bill Nelson worked together to come out with a fix for this issue that will be effective from November 16, 2013.
The new coding practices will help past short sellers in the following ways:
- Submit all the documents /proof of the short sale to their lender
- The lender will work for changing the coding to short sale
- The lender will then re-run the loan process through Fannie Mae system
As an alternative, you can also follow the below given steps for getting a conventional loan:
- Visit the official CFPB website or you can also visit this LINK directly to submit a complaint with CFPB.
- You can also ask your past short sale lender to provide you with an executive compliant escalation phone number. A request for lender letter that states your past loan as a short sale can be placed by calling this number.
A response from any of the above two steps can be submitted to your new lender as a proof of your past short sale. This will help you to get a conventional loan when you are eligible for it. Please write through the comment box for any queries or additional information in this regards.