If you found yourself having to negotiate with your lender to get out of your mortgage and have a Metro Atlanta short sale on your credit history, there are some things you need to do if you ever want to become a homeowner again.

Anyone who has been through a Metro Atlanta short sale is pretty much branded as a high-risk borrower, so new loans won't come quickly or easily in the future.

A short sale is when a lender agrees to accept less than is owed on a property, allowing the borrower to walk away and avoid foreclosure. Fannie Mae, the federally controlled mortgage investor, sets guidelines for the minimum amount of time that must elapse before a short-seller is eligible for another loan salable to the agency.

Waiting Period After a Metro Atlanta Short Sale

If you've been through a Metro Atlanta short sale, Fannie Mae requires a waiting period of at least four years for short-sellers who can only put down 10 percent on their next home. The waiting period is shortened to two years for borrowers who can come up with 20 percent.

Fannie does allow the four-year period to be cut in half for borrowers who can document that their Metro Atlanta short sale was a result of "extenuating circumstances." The agency defines these circumstances as one-time events that were beyond the borrower's control, such as job loss, medical bills, or a financial hit from divorce. Borrowers must also be able to show that they had no reasonable option other than to default.

Those who have been through a Metro Atlanta short sale who hope to someday obtain another mortgage should pay careful attention to their credit while riding out the forced waiting period. Frugal management of revolving credit should be first and foremost on your mind making sure outstanding balances do not exceed 30 percent of your credit limit. And borrowers should stay current on all of their credit obligations.

If you've been through a Metro Atlanta short sale, keep detailed records of income sources. New regulations require lenders to prove borrowers' ability to pay, and the more documentation you can offer, the more the originator can go to bat for you on a new mortgage.

Having a Metro Atlanta short sale on your credit history is not the end of the world, and certainly not as damaging as a foreclosure. Just realize, buying another home will be a challenge, but certainly not impossible.

Visit our Mortgage Info section of articles, including other articles concerning foreclosures and short sales by clicking on the Atlanta Mortgage Info link to your right under Atlanta Real Estate Categories.

There is still confusion today over the difference between Metro Atlanta short sales and foreclosures, so we wanted to hit the highlights of each in this short real estate minute video.

Both Metro Atlanta short sales and Metro Atlanta foreclosures will negatively impact your credit and ability to buy another home, but going the short sale route may give you a better chance of buying another home in a shorter period of time as opposed to allowing your lender to foreclose on your home.

We have other articles and tips pertaining to Metro Atlanta short sales and foreclosures by clicking on the Atlanta Mortgage Info link to your right under Atlanta Real Estate Categories.

Effective October 1, 2013, HUD has announced the following changes to their Federal Housing Administration (FHA) short sale requirements.

To be eligible, one must successfully complete a short sale under the FHA short sale program.

Short Sale Requirements for Metro Atlanta Borrowers

1) They cannot list the property with or sell it to anyone with whom they are related or have a close personal or business relationship. In legal terms, it must be an "arm's-length" transaction.

2) Any knowing violation of the arm's-length requirement may be a violation of federal law.

3) Your mortgage must be in default on the date the short sale transaction closes. Before closing, any additional liens against the property must be released. A lien holder who demands a payment to release its lien must submit a written statement, and an agreement to release the lien if that amount is paid.

For a standard preforeclosure sale, servicers must use a Deficit Income Test (DIT) to determine a homeowner's financial hardship. The IRS Collection Financial Standards is used to verify homeowners expenses not reflected in their credit report. Only owner-occupied properties are eligible for the standard preforeclosure sale.

Homeowners eligible for a streamlined short sale may not be required to submit financial information or have a financial hardship. Principal residences, second homes, investment properties, and service members who have received Permanent Change of Station (PCS) Orders are potentially eligible.

The appraisal of one's property should be completed within approximately ten business days. After the appraisal, the short sale file will be updated and prepared for review. In some cases, approval may be required by the investor and/or FHA, which may take more time.

As a new condition, one might be required to make a final payment (sometimes called a cash contribution) before closing. This payment will reduce the deficiency balance.
If one is an owner-occupant, acting in good faith, and successfully selling one's property, one may be eligible for an incentive of up to $3,000.

The revised FHA short sale addendum must be signed and dated by all parties. Under this addendum, all parties agree that the subject property must be sold through an arm's-length transaction. An arm's-length transaction is defined as a short sale between two unrelated parties that is characterized by a selling price and other conditions that would prevail in an open market environment. Also, no hidden terms or special understandings can exist between any of the parties (e.g., buyer, seller, appraiser, sales agent, closing agent, and mortgagee) involved in the transaction.

Get more mortgage tips and information by clicking the Atlanta Mortgage Info link to your right under Atlanta Real Estate Categories.