FHA Loan after Bankruptcy & Foreclosure

I have had a few clients buy after a bankruptcy.  I had a VA that bought 3 years later and got a 3.25% rate.  I was suprised he got such a good rate.

Tamara: Good thoughts. Thank you. I have a client who is looking right now as she served her sentence. I think the housing market will uptick over the next few years as those borrowers who walked away, etc. will be able to qualify again. Thanks again!

That’s great news for many, Tamara.  Thanks for the update!

Regards and respect,
jl4  Phil Leng

We are having a similar issue with a buyer now, first time buyer, slightly low credit scores after a bankruptcy that relates to medical issue from the job... we were going along great until the committment letter stage... then BLEWEY... all done, denied... workign to get this done with another lender now... we shall see...

Tamara , excellent post . You are so right , lots of lenders will miss the foreclosure as it does not appear on the credit report when you make it a part of bankruptcy . It will come up as part of MERS

Many people do get caught on the foreclosure part. I had one borrower last year where his BK was over 3 years old and the bank still had not foreclosed yet even though he had not made a mortgage payment in over 3 years. For some people, it will be much longer than 3 years from the BK.

We all educate our costumer before the agree into a short sale. I still think a short sale is a better option in stead of Foreclosure, Deed in Lieu of Foreclosure or even Bankruptcy. 

Many home seller know they can buy a home after 3 years, but not many know the have options instead of Foreclosure. Figure that out!?

Good information about FHA and foreclosure, thanks.

Thank you. I will forward this information to a client who will benefit from it.

Thank you Tamara for such an enlightening article!!

As a Loan Officer, during my conversations most people are unaware of the wait period and 

expectations. There is a lot of business with these people if you get them early with proper guidance

 

A BK Lawyer recently told me that they almost always include the home in the BK now, because there ia a ton less liability to them, in case the client actually goes into foreclosure later on.

So I would count on 3 years instead of 2 as the standard- if they had a home during the BK.

Good Post!

 

 

Knowledge is Power - Amen!  This recently happened to our god-daughter.  They thought the home was included in the BK but found the attorney never had them complete the Deed-in-Lieu.  The Lender never got around to foreclosing until several months after the BK - that date is now where the clock starts ticking.

Good info on more of the mis-information concerning the "penalties" of bankruptcy. THANK YOU!

Good info.  In this day and age many buyers have either a bk or foreclosure.  Thanks for sharing.

Hi Tamara, we agree the 3 year rule discourages strategic default.

the best tactic may be to try and update the credit report since it can be argued that the hforeclosure was part of the BK..this happens pretty frequently

You know BK and Foreclosure used to be a Scarlet Letter.  Now they are just a way of life.  

I had a client who wanted to buy a home in Arizona, but he had a foreclosure.  After researching the web I found a loan program at www.cfsflex.com, they allow a mortgage after a foreclosure.  There is no waiting period.  Good to see lending options coming back.

A lot of people lost their homes, through no fault of their own, that wanted to keep. The are many decent people in this pool that need a second chance.