Bankruptcy – You may apply for a FHA insured loan after your bankruptcy has been discharged for TWO (2) years with a Chapter 7 Bankruptcy. You may apply for a FHA insured loan after your bankruptcy has been discharged for ONE (1) year with a Chapter 13 Bankruptcy
Foreclosure - You may apply for a FHA insured loan THREE (3) years after the sale/deed transfer date.
Short Sale / Deed in Lieu – You may apply for a FHA insured loan THREE (3) years after the sale date of your foreclosure. FHA treats a short sale the same as a Foreclosure for now.
Credit must be re-established with a 640 minimum credit score
2014 VA Guidelines
Bankruptcy Ch 7 - You may apply for a VA guaranteed loan TWO (2) years after a chapter 7 Bankruptcy
Bankruptcy Ch 13 - If you have finished making all payments satisfactorily, the lender may conclude that you have reestablished satisfactory credit.
If you have satisfactorily made at least 12 months worth of the payments and the Trustee or the Bankruptcy Judge approves of the new credit, the lender may give favorable consideration.
Foreclosure - You may apply for a VA guaranteed loan TWO (2) years after a foreclosure
Short Sale / Deed in Lieu - You may apply for a VA guaranteed loan TWO (2) years after a short sale, unless it was a VA loan then restrictions apply
Credit must be re-established with a minimum 620 credit score
2014 USDA Guidelines
Bankruptcy - You may apply for a USDA rural loan THREE (3) years after the discharge of a Chapter 7 or 13 Bankruptcy
Foreclosure - You may apply for a USDA rural loan THREE (3) years after a Foreclosure
Short Sale / Deed in Lieu of Foreclosure - If you had big issues the deed in lieu of foreclosure will be viewed as a foreclosure and you would want to wait no less than 3 years if the score is under 640. Over 640 your UW will make the call but typically not less than one year.
Although I have not personally processed a USDA with a short sale under 3 years, I have heard of instances when it is possible to buy again with re-established credit in as little as 18 months.In some cases there is not a waiting period.
If the credit was perfect and they had to move because of a relocation or something and had no choice but to ask for a deed in lieu of foreclosure you would be ok.
2014 Conventional (Fannie Mae)
Bankruptcy – You may apply for a Conventional, Fannie Mae loan after your Chapter 7 bankruptcy has been discharged for FOUR (4) years, TWO (2) years from the discharge of a Chapter 13
Foreclosure - You may apply for a Conventional, Fannie Mae loan SEVEN (7) years after the sale date of your foreclosure. Additional qualifying requirements may apply,
Short Sale / Deed in Lieu of Foreclosure - UPDATED 12/16/11 Currently treated the same as a foreclosure with a waiting time of SEVEN (7) years before you can buy again using a Fannie Mae conventional home loan.
TWO (2) Years up to Maximum 80% Loan to Value | 20% Down Payment
FOUR (4) Years up to Maximum 90% Loan to Value | 10% Down Payment – Subject to Private Mortgage Insurance underwriting guidelines.
SEVEN (7) Years above 90% Loan to Value | with less than 10% Down Payment – Subject to Private Mortgage Insurance underwriting guidelines.
Credit must be re-established with a minimum 680 credit score.
Fannie Mae has reduced waiting periods in cases of extenuating circumstances – The death of a primary wage earner seems to be the only one I have been able to identify up to this point.
2014 Jumbo Mortgage Guidelines
Bankruptcy - You may apply for a Jumbo mortgage loan once any chapter of bankruptcy has been discharged for FOUR (4) years, FIVE (5) years if multiple bankruptcy occurs on credit profile.
Foreclosure - You may apply for a Jumbo mortgage loan SEVEN (7) years after the sale date of your foreclosure. Additional qualifying requirements may apply,
Short Sale / Deed in Lieu of Foreclosure - You may apply for a Jumbo mortgage loan:
FOUR (4) Years from Short Sale or Deed in Lieu of Foreclosure with Maximum 80% Loan to Value
NOTE: If hardship is the result of an extenuating circumstance, waiting periods may be reduced. Contact lender for details.
Branch Manager at Broadview Mortgage Long Beach, California, I am passionate about educating and empowering consumers. Feel free to call, text or email me at (562) 999-1355 or ScottS@broadviewmortgage.com
AUGUST 2013 FHA UPDATE: If a borrower meet the new FHA “Back to Work” program criteria, they will be eligible for an FHA loan 1 year after short sale.
Something else just came out in January 2014 about your debt to income ratio and what it needs to be to qualify for a mortgage.
My husband and I are hoping to qualify for this, we live in Worcester MA. Bankruptcy, chapter 7 in 2009, short sale in 2011. I have 4 collection medical bills on my credit report that state they were included in bankruptcy. I also have 1 late payment in 6/12 for a credit. I have disputed this, setup automatically payments thought they would be indefinite, but because of capital one buying orchard bank auto pymts were setup for 3 mnths. I had email alerts setup but did not receive them. I called they said they would take care of it and were sorry for the problem.
Will one late payment really stop us from getting another home if I can't resolve this?
My husband and I had a home foreclosed on in 2008 due to a predatory loan and then we filed Chapter 7 with a discharge date of 1/24/2012. We received a 1099-C on the foreclosed home in 2009. My credit is a 696 and my husbands is a 676, we have re-established credit with 2 car loans and no late payments. Will we be able to buy a home on a USDA guaranteed loan?
I have a chapter 7 bankruptcy discharged 9/12, Lost job due to injury on the job and I am now on Disability with steady income. I have established new credit card accounts with 12,500 line of credit which I am only utilizing about $400.00. No late payments or any derogatory issues after the bankruptcy. I keep reading all over the internet that you can get financed after on year if you have extenuating circumstances. Would I qualify? And if so who does these type of loans, I haven't been able to find anyone. Looking to move to Florida. Any help or suggestions? Thanks!
my bankruptcy has been discharged for two years but my house hasnt sold yet at sherrifs auction i meet all income guidlines(120000 combined with spouse) and employment wife 25 years and me 6 years does this house not being sold yet hinder me for applying for loan
my wife and I recently divorced in june of 2013. we started our house loan in 2003,after switching several lenders for better rates my now ex wife lost her job in 2009. to that point we were not behind or late on any payments. she struggled to find a new job until 2010. by that time we were behind on the mortgage and were advised out best option would be to give up the house in bankruptcy. it was discharged in aug 2010. now we are divorced and I am trying to get a home loan (don't care for renting anylonger). who are the best options as far as getting a loan with past bad credit. my score is 651 but that mostly reflects the bankruptcy. I am having trouble finding a reputable lender willing to help me start over. I am not looking for an extravagant house out of my means, just a $75000 loan on a home appraised for $110,000 from a friend. any help would be greatly apprieciated..
I have a question, If my brother goes through with a "deed in lieu" instead of a short sale would I be eligible to purchase his home? This my be a silly question because I know in a short sale situation family members can not purchase the home but how about a "deed-in-lieu"? Thank you for any and all help you may have =)
I want to make sure I understand you correctly. If I made 12 months of on time mortgage payments prior to deed in lieu I would be eligible to buy immediately after recording deed in lieu ? Or that even with on time (12 payments) I still need to wait a year from recording deed date to utilize FHA program?
California resident, chapter 7 bk filed/discharged in 2010 and divorced in 2011. Spouse had lost his business and home wasn't reaffirmed was in pre-foreclosure limbo for 3 years. With that being said all finances fell in my lap. Deed in lieu just recorded last week (yippee). My question is, do you think I will be a candidate for FHA back to work extenuating circumstances ?
crazy question but i have gotten no answers from my BK attorney at all, I lost my job in 2009, 2010 i was forced to file BK including the home. the home just now went to sherrifs sale on 5-30-13, sold to the lender HSBC. now it was just listed with a realtor for about 50% of our mortgage amount. We considered buying it back now but also noticed my name is still on the title even 4 months after the sherrifs sale. Also during the BK proceeding i was forced to get another title copy as the one on record was incorrect. Does this mean anything or am I just beeing hopeful we could buy our house back or move back in as the current owners? I know its a dumb question and Im probably being hopeful somehow they messed up the title during one of the many bank transfers. We had about 6 different mortgage holders throughout the mortagage, just kept getting sold off to different lenders.
I had a foreclosure. The deed transfered on 11/09 to the bank. They sold the difference to a collection agency that shows it as a mortgage on my credit report. Even though its been over 3 years, a 703 credit score and income of over $100,000/yr for over 10 years...banks see that mortgage collection and tell me theres nothing they can do. Shouldn't I qualify for FHA? What are my options? Thanks very much for any info.
Hi I cosigned a house I was living in with my sis then I moved out into my own home she has lost her job and has even been in the house 2 months what can we do to let the bank have it just so we dont foreclose the bank is secu in nc I can float 2 house s and I dont want to lose mine our loan was 85 000on a house that appraised for 11000
My name is Melissa, and i have a question for you. I live in Kentucky, my husband qualifies for a fha loan, do to some car issues i had to use our down payment we had saved to fix it. We filed bankruptcy with a house on it, discharged and sold in May of 09, i live in a rual housing area and i wanted to know if we would qualify for it. I know his credit score is a 620.
Hi, our bankruptcy was in 2009. We kept the house but now husband health is going down and he cannot go up stairs. We owe more on the house than it is worth and would like to move to a ranch style home. How do we go about doing a short sale. We have never been late on a payment. Then can we buy immediately if we can do a short sale? We live in Colorado. any recommendations would be appericated.
@kgarson22 Hi KG, The waiting period after a short sale is 2 years if you have 20% down and a minimum 680 credit score using Conventional financing. FHA only requires 3 years from short sale. It doesn't sound like you would need to worry about qualifying for an exception since you're already close to meeting the waiting period.
The late payments should not be an issue as long as there is not a pattern of delinquent payments after the BK. Lenders are typically looking at the last 12 months of payments when determining loan eligibility.
@hswallis USDA requires a 3 year "waiting period" before you would be eligible after a foreclosure or bankruptcy. You are well past your waiting period for the foreclosure, but the BK puts you at 1/25/15.
FHA only requires a 2 year wait after a bankruptcy which would make you eligible now. Since your foreclosure was in 2008, you are also considered a "first time homebuyer" for many buyer assistance programs.
What State are you buying in? We are a direct lender in California. If you are also in California I would be happy to give you more information about assistance programs that can get you close to the 100% financing that USDA offers.
@crna1ab what you are seeing online about buying a year after bankruptcy is the FHA Back to Work extenuating circumstance exception. You have to specifically ask the lender if they are able to offer that program, not all lenders can. If you do not already have a lender in mind, I can recommend someone I know that might be able to help.
In regards to the disability, if you are permanently disabled, and receive permanent disability social security income, then you can actually buy 1 day out of bankruptcy. You will have to show that your disability is permanent and that it resulted in a 20% or greater loss of income, the result of which caused you to file the bankruptcy.
If you would like that recommendation, shoot me an email to firstname.lastname@example.org and I will make an introduction.
@pyramid66 unfortunately, you are still the owner of the home, and the loan is in default. Even though the mortgage is not being reported on your credit, it is still viewed by a lender as a mortgage in default if you are more than 90 days late on the mortgage payment.
You would be unable to use Conventional, FHA, VA or any Government overseen entity. There are private lenders that may be willing to accept the risk. This loan would require a large down payment and would have high rates and fees.
If a short sale or deed in lieu of foreclosure is an option, I would pursue that path to expedite the removal of your name from title.
Depending on how your name is removed from title will determine how long of a waiting period will be required before you are eligible for a mortgage.
Allowing the bank to foreclose carries the longest waiting period of all other options.
@ckrocknroll this really all comes down to what happened to the home after including it in the bankruptcy. BK will protect you from any tax liability resulting from the default on the mortgage, but it does not extinguish the liens against the property, you still own the home until your names are removed from title.
There are a lot of moving parts here, it's not really possible to unravel all of the possible challenges or options based on the information you've given me here.
It sounds like there may be a case for qualifying under the Back to Work extenuating circumstance due to a drop in household income (when your wife lost her job). That would put you in a position to possibly buy again sooner if you lost the home as a result.
@StephanieHansen this is a good question! A short sale occurs when the bank allows the owner of the home (your brother) to sell the home for less than what is owed on the mortgage. Under this circumstance, as you know, the bank will not allow the home to simply be sold back to the owner (through relatives) at a discount.
There is not "sale" per se, with a deed in lieu. A DIL is the bank agreeing to relieve your brother of the debt in exchange for the signing over the title (ownership) directly to the bank. At that point, the bank will repossess the property and most likely process and resell it on the open market as a REO (real estate owned).
You can monitor the activity on the home and as soon as a for-sale sign goes up, you can make an offer to purchase the home at fair market value.
@Beastie2us FHA typically requires a minimum 640 fico score, however, individual lenders may require higher. 12 months on time payments will consist of all liabilities that show up on your credit report including your home.
@Beastie2us That is correct. If you can show that the hardship resulted in 20% or more drop of household income, and you can show that you've recovered from that hardship as evidenced by 12 months of on-time payment, you could be eligible.
The 12 months of on-time payments includes all payments on credit report.
Again, we can determine if the hardship qualifies for "Back to Work" by collecting all of the documentation that FHA is asking for as proof. But of course you would have to have the 12 months payments before you get a full approval.
@Beastie2us It does sound like you have the extenuating circumstance of a 20% decrease of household income over a 6 month period. The loss of income can be documented with tax returns, unemployment benefits, or public, 3rd party verification of business closure (did it make the papers?)
The second part of this is the 12 months of on-time payments. Unless you caught all the payments up prior to the deed in lieu, that 12 months starts last week.
Shoot me an email with your contact information if you would like us to review everything and get you pre-approved for new home (pending the waiting period).
@tjohnson999 this isn't a crazy question, it's a good question. The biggest challenge you would have is the fact that you had a defaulted mortgage up until at least 5/30/13.
Normally, you would have a minimum 3 year wait to buy after foreclosure using FHA financing, but it sounds like you may qualify for the Back to Work Extenuating Circumstances exception.
You would need to speak to a lender (what State do you live in?) to explore using the this exception, at the very least, you're going to need 12 months with no late payments - even so, that puts you at 5/30/14 before you're eligible.
Lastly, most lenders will not sell the home back to the person that they had to foreclose on so even if you are eligible to buy.
@one4debate The new FHA exception re 12 months out of BK, Foreclosure, Short Sale, etc. has some requirements to be aware of: Borrower must demontrate/prove a minimum 20% decline in income proceeding the derogatory credit, have no accounts currently in collection, no late housing payments for last year, no more than 1 30 day late on any other accounts in the past year, and must get FHA approved counseling prior to applying (not completing - applying) for the loan. There may be other requirements, too. Strategic defaults/BK's will not not have the 12 month waiting period.
@ajtraylor I would need a lot more information in order to tell you specifically what the challenge might be. You are correct that would be eligible based on a the waiting period from a foreclosure, but it doesn't sound like that's the problem here. Did you have a HELOC, or second mortgage? Or just the first?
Are you in California? I would definitely like to take a closer look. Doesn't make sense from what you've explained.
@mtllvr Hi Melissa, thank you for the question. USDA guaranteed requires a 3 year waiting period before after a hardship such as bankruptcy or short sale. Based on that, you're eligible to start getting the fact about the loan options available to you. With the 3 year waiting period, you would also qualify for VA or FHA financing. I have a friend that can lend nationwide and specializes in USDA rural loans. I will send you contact information by email.
@ScottSchang we are in Oklahoma. I've look at the FHA back to work program and it appears that may be something we would qualify for. I've also seen different grants that are available for down payment assistance. We do have a mortgage broker and she seems to only want to go the USDA route and thinks that she can get us approved even though we aren't past the 3 year mark. We aren't dead set on the USDA loan but we are ready to get out of a 2 bedroom rent house with 2 kids!!!
@ScottSchang@ckrocknroll the house went to the mortgage company and was sold at auction. for half of its appraised value. its currently owned by a new couple. we had a deed in lieu on the home which clears the 3 year wait period in april of 2014. we definetly loss the home due to my ex wife's loss of her job. up to that point the mortgage was in good standing and both of our credit ratings were around 700. now that its just myself I'm trying to get a home for myself and my son but finding it challenging to find a lender willing to "take a chance" on me.
@kristenmarthabrown@one4debate Thank you for your input Kristen, I believe that's what @one4debate is referring to, which is an expansion of the Extenuating Circumstances exception definition and not an actual change to FHA's position on buying after default.
There's no second. It's the original loan. The difference between what it sold for and the loan amount was sold off as debt to a collection agency called Real time Resolutions. It shows on my credit report as a past due mortgage, even though they admit that the property has been sold. I have title work showing the deed transfer to the bank and then them selling it and transfering the deed again. I did not have a HELOC. I live in Florida. Thanks again for any info
@teri2010 there's not really any such thing as just "giving it back". You should certainly inform the lender that your sister is having employment challenges. There may be a program to help cover her payments in the event that she's laid off (California has a program like this).
The lender cannot come after your home, however, you will have a blemish on your credit report if your sister defaults on this loan.
@ScottSchang oh my gosh Thanks a Million @ScottSchang. We've been waiting patiently for buying a home and with a 16 year old (well tomorrow) and a 14 year old we are ready to get more room. I'll definitely ask our broker and let her know if USDA won't do it we aren't opposed to doing FHA by no means. You've made my day.
@ckrocknroll@ScottSchang the very best and quickest way is make sure that your balances on revolving debt (credit cards) is under 25% of the high balance.
If you do not have any revolving credit lines, you'll need to get some. The biggest challenge I've seen with folks coming out of bankruptcy is that they don't purposely build good credit after letting everything go.
I learned that one the hard way myself. You have to credit cards, and pay them down to $0 every billing period.
@ckrocknroll@ScottSchang ok, good! It sounds like worse case scenario is that you are eligible for FHA financing in april of 2014, and, with a minimum 680 credit score (shouldn't be too hard to get 30 points) and 20% down payment, you would be eligible for Conventional financing now.
It sounds like you definitely have options. The real question is can you buy before April of 2014. You can if you meet the conventional guidelines, or if your'e eligible for VA financing.
@ScottSchang@kristenmarthabrown@one4debate Exactly, hte Back to work program, it is just my intent to let people know, there are exceptions to the rules, Kind of gives hope to those who did have extenuating circumstances beyond their control, just so they are aware they CAN still qualify for FHA should they meet the criteria under the new program.
@ScottSchang@ajtraylor That would be great Scott, thank you. I'm currently dispute this with the credit reporting agencies. How can they show an open mortgage account when I don't own any properties? Is this the normal way to try and collect on a foreclosure deficiencies? The company that's doing it won't send me validation to collect on this loan. Very shady.
@teri2010 no, nobody can come after your home specifically. However if the home defaults, you may receive a 1099 for any losses the lender may incur as a result. You probably want to speak to a real estate attorney to get all the facts about what to expect and how to prepare yourself for any liability that may come from you co-signing on the loan.
@teri2010 If you are on the loan documents and the Note, then any default would affect you just as it would your sister. A deed in lieu on your credit would require you to meet the minimum "waiting period" before you would be eligible for traditional financing.