Home Loan After Loan Modification
I got a call today by a gentleman who did a loan modification 4 months ago.
Now he wants to rent that home out and buy another home 'closer to work'. Long story short..... He was denied.
Here are my loan guidelines. I guess some lenders who portfolio their loans can ignore these rules though under certain circumstances. Lenders in the wholesale market will be bound by them
Restructured or Short Payoff Loans
If the borrower is completing a short payoff or has had a previous loan with a short payoff this is considered a significant derogatory credit. A short payoff or restructured loan would be treated similar to bankruptcy, foreclosure, or deed-in-lieu of foreclosure and is subject to the same waiting period before new financing is approved. If the significant derogatory can be attributed to “extenuating circumstances” at least two years must have elapsed since the incident was completed.
Bottom line: A loan modification is not some 'freebie from obama'. <= I hear this all of the time from clients and tv ads. It is a significant credit event. If you don't pay according to the original terms of the contract then you are not making timely payments on your mortgage. Period!!
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