BK or Foreclosure rules which apply?

[monkatom]

Hello I have tried to research this question but have gotten conflicting answers so I was wondering if anyone could help. I was discharged chp 7 in May 08. At the time planned to keep house but did not reaffirm. Have since decided to walk away. House shows as IIB on credit report.
This is the question, in order to get a conventional loan am I ok with 2 years from BK or will it follow the 3 years from foreclosure? I even asked a lender with countrywide and she was not sure. She told me to apply at the two year mark and see what happens. I was hoping someone on here would have an idea or was a lender that would know.

[justbroke]

If the house was IIB, then it's from the time of the filing of your petition.

[monkatom]

I had a lender tell me conventional is 4 years from BK? If so could I do an FHA 2 years after BK?
Thanks

[justbroke]

I had a lender tell me conventional is 4 years from BK? If so could I do an FHA 2 years after BK?
Thanks

FHA is 3 years after a Chapter 7 and 2 years after a Chapter 13.

Otherwise, you may have to wait longer for "conventional" financing. Having a good amount of money to deposit, is always good.

[monkatom]

This is from FHA.com is this wrong or not updated as it says 2 years?


At least two years must have elapsed since the discharge date of the borrower and / or spouse's Chapter 7 Bankruptcy, according to FHA guidelines. This is not to be confused with the bankruptcy filing date. A full explanation will be required with the loan application. In order to qualify for an FHA loan, the borrower must qualify financially, have re-established good credit, and have a stable job.

[justbroke]

I don't know if it's right or if I'm wrong. There were some changes to the program. What you have from the website may be correct.

I think I may had been too quick to type. I do remember that they will take Active Chapter 13s who have paid on time during the plan and that Chapter 7s that are at least two years post discharge and close.

[StartingOver08]

The official website for FHA loans is not the fha site you visited (that is a private site).

The official site for all information regarding FHA is: www.HUD.gov

E-mailed one of my lenders and he states:

FHA still only requires 2 yrs from Bankruptcy if you have re-established your credit
Conventional loans now require 5 years from bankruptcy.

I expect that there will be changes to both of those requirements in the next couple of years just because of the credit market situation. So you have to monitor your reports, reestablish your credit and then keep checking the guidelines! Kinda like a 2nd job...!

[monkatom]

Thanks for the info. I have opened three new trade lines that all stay below 10% utlization plus two student loans. My Faco scores are in the 660's right now and I watch my credit monthly. Hopefully in a year and a half I can be in the high 600's or maybe even low 700's.
Thanks

[halloweendmb1]

Conventional require 4 years from discharge date 13 or 7. If a foreclosure is involved it could be up to 7 depending upon if it was a short sale, deed in lue of foreclosure etc. Fha is still 2 years but they want 3 tradelines after BK to show you can pay on time.

[monkatom]

Startingover did your lender know if underwriting would use the BK date or would they do a title search and see the property was foreclosed under my name and use the foreclosure date? I spoke with two different lenders from countrywide and one said BK date and one said foreclosure date.
Thanks

[Logan]

Thanks for the info. I have opened three new trade lines that all stay below 10% utlization plus two student loans. My Faco scores are in the 660's right now and I watch my credit monthly. Hopefully in a year and a half I can be in the high 600's or maybe even low 700's.
Thanks

The number of trade lines is set by the lender not FHA. I have spoke with a few different lenders and one required only 2 trade lines and another required 4. I have read the HUD Handbook (Handbook 4155.1) and there are no specifics on the number of trade lines. If you've declared BK the requirements will be tougher than someone with 10% down and a good credit score.

Also, credit score is not as important for an FHA loan as it is for a conventional. I would not worry about your score as much as raising money for a down payment and of course paying your bills on time and in full.

Logan

[halloweendmb1]

FHA requires 3 tradelines but they don't have to be on the credit report. I helped someone by a home with a zero credit score we used cell phone bill, rent and electric bill as proof he paid on time. FHA is tightening its standards and each investor can make FHA even stricter, some have already put a min. credit score of 620 into place already!

[Logan]

FHA requires 3 tradelines but they don't have to be on the credit report. I helped someone by a home with a zero credit score we used cell phone bill, rent and electric bill as proof he paid on time. FHA is tightening its standards and each investor can make FHA even stricter, some have already put a min. credit score of 620 into place already!

I get my info from underwriters, the FHA handbook and I've spoken with an FHA counselor at 800-327-6778.

I suggest that anyone who wants to buy a home not listen to us and do your own research.

The other thing you can do is find a loan officer that knows how to get a deal closed. When I bought my 1st home I had a challenging scenario and went to 5 different lenders. Four of them said sorry I can't help you but one of them got it done and it was a great loan.

The funny thing is I called that same office (last month, 8 years later) and the loan officer told me that FHA requires 3 years after BK. I said 2 and she continually said 3. It's possible that they require 3 since the lender can be stricter than FHA but either way this is someone I won't want to do business with.

Good Luck,

Logan

[monkatom]

Thanks for all the replies and info. I appreacite it.
I am still confused though if I can use 2 years from BK or will I need to use foreclsoure rules since house will be foreclosed upon but not on credit report? Do you think i could ask someone on the FHA number listed above? I have searched, contacted 3 lenders, my lawyer, and myfico forum and received different answers.

[Logan]

Thanks for all the replies and info. I appreacite it.
I am still confused though if I can use 2 years from BK or will I need to use foreclsoure rules since house will be foreclosed upon but not on credit report? Do you think i could ask someone on the FHA number listed above? I have searched, contacted 3 lenders, my lawyer, and myfico forum and received different answers.

I would call the number.