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Zombie houses is a slang for vacant foreclosure homes that has been abandoned for a long time. There is still a lot of them out there and banks are slowly getting to them but it's still causing a lot of problems in some neighborhood. It's a sign of what the real estate market in Tampa has been through. These are remnants of the catastrophic real estate market a few years ago. Because of the crash, there is a hidden audience of people who did short sales, that had been foreclosed on but have now recovered. They are now having a hard time getting a new home because of the qualifications in place for lenders now.
Arnie says that it depends whether you are going with FHA or a Conventional there is a waiting period wherein the FHA is more lenient on a short sale or foreclosure - 2 years on a short sale, 2 years for bankruptcy and 3 years on foreclosure. While with a conventional loan, if you go above $271,000, it has a waiting period of 2-4 years for a short sale and 4-7 years on a foreclosure.
Andrew talks about part of the obstacle with the waiting period is that it is dictated by the sale date. Some of those foreclosures and short sales took about 2-3 years so in reality by the end of it, some people have already started to recover. They might not be able to catch up with the $100 k past due for example but Andrew believes that the waiting period should start at the point when the home owner got so many months behind not the point where the bank took the property back because it's really hard on people when in reality they have already been recovered for 4 years but looked at as 2.
Arnie shares the new guideline for Fannie May when applying for a conventional loan where if you file for bankruptcy and include the house in the bankruptcy yet the foreclosure happened after the bankruptcy, the waiting period goes back to the date when bankruptcy was filed and not on the date of foreclosure.
Although there are only a few people who might be going through the same situation but want to buy a home, Andrew recommends to talk to a lawyer and seek advice. Andrew again said that sometimes the timeline doesn't make sense. There might be some people out there who took 3-4 years before foreclosure finally happened or somebody who started missing his payments 6 years ago but have already recovered and now has a high paying job, etc, but are still being penalized and not able to get a loan.
Arnie talks about the extenuating circumstances that would give less of a waiting period for people who went through the same thing but some examples are usually death of a primary wage earner, military related type of situation or medical situations. A divorce is not included though.
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