Have large down payment, did a DIL on a rental, now can't get a loan for a Primary. Any advice?

[Matthew Peterson]

Hi everyone,

I have a quick question about purchasing a REO as a primary residence, but first some background info. Just wanted to get some thoughts/ideas.

I've had rental property for 6-7 years, all in Florida. I had a property in South Florida that I got hammered on and ended getting Bank of America to accept a Deed in Lieu on the property for a tidy cash contribution. This rental was in my name, so it nailed my credit at first, but, because I have some other rentals and a primary in my name, my credit has rebounded to 700.

All of my loans (primary and other rentals) are with Wells Fargo. I got a job transfer to Atlanta and just sold my primary residence in FL. I have a 60-70% down payment for a primary in Atlanta and yet Wells Fargo won't give me a loan, even though I have other property with tons of equity that generate income plus my primary that just closed, which they also had. I'm perplexed. They are saying the 2 year moratorium for DIL or foreclosures prevents them from doing so. My two year lockout concludes in October 2011.

I've received an offer for an 8% rate from a small regional bank, but don't want to go with that with the anticipation that I could wait until October and get a lower rate.

I'm exploring the option of buying a REO, but have no idea where to start. Should I hire a realtor who specializes in these or should I go at it alone? I saw the REO board on here with the Fannie Mae, BAC, Wells, etc REO's but most seem to have offers, etc. When searching for REO's as a primary residence in the 400K range, how long do the good deals stay available? or are they scooped up fairly quickly. Any thoughts or insight is greatly appreciated.