FHA credit guidelines

[yellowstone]

That's true about claims if the loan foreclosed was FHA. If not...from everything I've read, if you surrendered your home in a chapter 7, you can buy a home with FHA 3 years from discharge date.

I sure hope that is true. We surrendered the house in the 7, the bank got stay relief, but they are taking their time to foreclose. I read the FHA guidelines and didn't see this exception. Can anyone confirm?

[sick of debt]

I have been told that it is 2 years from bk discharge without a foreclosure. If you foreclosed on your home, then it is 3 years from the date the deed was changed over to mortgage company. I got this information from a mortgage broker. Let me know if anyone has heard differently.

[denisec]

Hi "sick of debt", I received that info from a mortgage broker also, but an FHA rep told me that if you discharged your mortgages in a Chapter 7, then the time frame would be 3 years from the DISCHARGE date, not the sale date. Or 3 years from last payment date. Discharge = Foreclosure. I was told they treat a mortgage discharge like a foreclosure...so would use the 3 year seasoning period from date of discharge. Bottomline, I am not sure any one knows for sure...and I think it would be case by case with your lender...also if you can save 10-20% downpayment or more, you can probably buy sooner than the 3 year period.

[dspii]

denisec - I can only hope that the FHA rep was correct, logic seems to tell me that his would be accurate. But then again, logic and law are opposites in most cases. Most of the posts I have read say 3 years after foreclosure, but if you discharged your mortgage, paid through for a couple years then gave it back, most think that it would be 3 years after the title was removed from your name. At the pace of foreclosures today, your BK would expire from your credit report before your name was removed from the title. Very interesting.....I'll research and keep my eye on this thread for a while to see if someone can point us in the right direction.

[sick of debt]

Hi "sick of debt", I received that info from a mortgage broker also, but an FHA rep told me that if you discharged your mortgages in a Chapter 7, then the time frame would be 3 years from the DISCHARGE date, not the sale date. Or 3 years from last payment date. Discharge = Foreclosure. I was told they treat a mortgage discharge like a foreclosure...so would use the 3 year seasoning period from date of discharge. Bottomline, I am not sure any one knows for sure...and I think it would be case by case with your lender...also if you can save 10-20% downpayment or more, you can probably buy sooner than the 3 year period.

I am sooo confused. What do you mean by the last payment date. My discharge date was 12/08, however the title of my house was chaged over 08/08.

[mikel2424]

Hi guys, new to the forums here.

I never went BK, however I lost my job due to layoffs and had to stop making payments in 11/07 on my home. In 11/08 the bank took the property back over. Most people have been telling me 3 years from foreclosure date before I can buy again, I have a union job now and make 70k a year + ot and benefits, and have enough money saved for a down payment, also have no debt any more. I am confused as to if I can purchase 3 years after I made my last payment, 3 years after the bank took the property back, or 3 years after the realtor sold it to a new owner?

[Ugh07]

usually it will be 3 years after the title was taken out of your name.

[JaysonFL]

I am going thru the process to purchase a house now. Here's what I have found.

Chapter 7 discharge sep-08.

I have been pre-qualified by every bank and mortgage broker. However, FHA requires:

3 years out of discharge date if there isn't a foreclosure. That means on your credit, nothing states that it was a foreclosure. I included all my homes except for my homestead home. So no foreclosure shows up on my credit. If you have a foreclosure, it's the date the title of your house got transfer to another lender or person. That date is usually the sales date also. Then you must wait 3 years from that date. So if you have a bankruptcy and a foreclosure, you must wait 3 years from the foreclosure (That also covers the mandatory 2 year wait for a bankruptcy).

I am trying to get an exception but FHA requires documentation and show that my extenuating circumstance cause my income level to drastically fall and help cause my foreclosure or bankruptcy. Short of something health related, the lenders are very hard on this.

Hope this helps.

[denisec]

Thanks JaysonFL, this is very helpful. Did they check public records to see if you had a foreclosure? If I understand you, they just go with what's in your credit report...mine is the same my mortgages were discharged with a BK July '09, they show zero balances, and don't report at all since discharged in the BK. I am still in the house, saving money....and after a year not even a NOD.. So even if they end up foreclosing, from what you say I should be able to buy within 3 years from discharge date or July 2012? What do you do when the application asks if you have had a prior foreclosure? And, what do you do if they want last 2 years of residence, and some of that time is in the house that is foreclosed on? I have heard someone disclose the foreclosure, and then it blew the deal. There shouldn't be anything else on my credit report re: the houses, since they are included in the BK, and by law cannot report after discharged. So do you think I am interpreting correctly? Thanks for your information.

[AJA]

I might also add that FHA will consider a loan if your ch7 was due to medical reasons. I was discharged in 11/09 and will be closing on a refi this week. Had mortgage with BoA and it was IIB. Never was late or missed a payment. Only needed 3% equity and I had more. Paying PMI and 1 pt. 4.75%. New lender worked well with me and understood why I had to file. Current on everything up to filing. Always pay your mortage if you can. FHA will make an exception if you can prove a medical issue caused your filing.
This is not to say I wasn't at fault for having so much cc debt. Glad to have my fresh start though. Aja

[JaysonFL]

They DO check county records. Not sure how you can stay in the house if it was discharge? Does the bank own it then? or did you reaffirm your debt and kept the house? I would ask a mortgage broker with the lender that you are trying to get a loan from on what to do.

[denisec]

You can stay in the home if it was discharged that's a nonissue. You just stay and pay, hardly anyone understands this scenario, including attorneys and lenders. Or..you stop paying and you can stay in the house for probably at least a year or more, given how slow the banks are right now. I've been in my house since Nov. 09 without paying, socking away money, and researching next steps. If you want to buy more time, hand your case over to one of these loan mod folks, that will drag the process out even further, you probably won't get a mod, but it will buy you more time to save and prepare for next steps. Remember there's a lien on the property, so the bank can eventually foreclose. But given that it's discharged you don't have any personal liability for the debt, and no more consequences to your credit after the BK. Actually more people should pursue this option. Most banks are not reaffirming now anyway, and reaffirming is usually not a wise decision.

[denisec]

Ya, you can find that information easily on the internet. The problem comes with any grey areas, then try finding an answer. No one really knows, it's a case by case basis with the u/A. It's amazing how ignorant lenders are about FHA rules too.

[PHXDWTN]

So it's 2 years wait from the discharge date or 3 years? Or is the 3 years only if you had a foreclosure on your record as well?

[yellowstone]

jayson's info is consistent with what i read on the fha website. it stinks, because we have been trying to get the bank to take the house back (moved out 2 years ago) and have been discharged for 6+ months now. HAMP is a joke.