FHA vs Conventional

[GettingGoing]

I believe I was saying the same thing. But ya, there shouldn't be any confusion on how long you need to wait.

So if one goes with a FHA mortgage, has 20% down, do you still carry PMI, or is there a variation of this one has for FHA?

Is there a way around this whole 3 year after foreclosure? Our fha insured mortgage will be discharged in our bk7 however we will stay current on payments until we are ready to buy another house in a few years. If we can sell the house for what we owe in it then of course we should be eligible for another fha mortgage however if we are still underwater but current on payments would it be possible to get an fha mortgage and walk away from our discharged home?

[newbie2]

Is there a way around this whole 3 year after foreclosure? Our fha insured mortgage will be discharged in our bk7 however we will stay current on payments until we are ready to buy another house in a few years. If we can sell the house for what we owe in it then of course we should be eligible for another fha mortgage however if we are still underwater but current on payments would it be possible to get an fha mortgage and walk away from our discharged home?

Think about what you're asking. You have an FHA insured mortgage that will be discharged by your bankruptcy. You want to be able to walk away from this home and ask FHA to lend you more money.

They have the 3 year from foreclosure rule for a reason. They've tightened up their guidelines because they were going broke from all of the foreclosures. They've also increased the minimum down payment required and upfront MIP required. This was also done for a reason (the increased foreclosures and loss of money)

[BKLending]

Under the current guidelines, you would have to wait until 2/2012 because there was a mortgage that was included in the Bankruptcy. It is important to check to see if your old mortgage was a FHA loan. That might change things a bit. NOt to pry, but if there were some unusual circumstances, such as a lose of income due to death in the family, they may consider a shorter timeline than the 3 year waiting period.

[BKLending]

Think about what you're asking. You have an FHA insured mortgage that will be discharged by your bankruptcy. You want to be able to walk away from this home and ask FHA to lend you more money.

They have the 3 year from foreclosure rule for a reason. They've tightened up their guidelines because they were going broke from all of the foreclosures. They've also increased the minimum down payment required and upfront MIP required. This was also done for a reason (the increased foreclosures and loss of money)

If your FHA mortgage was in your Bankruptcy, FHA expects that you will not only wait the 3 years until you can qualify again, but they also want you to pay them the money they lost in your transaction, and then wait 3 years prior to qualifying again through FHA. I am confused by the earlier post. If the mortgage is in the BK, you can't keep making payments on time and stay in the house. It sounds more like they are keeping the house and not including it in the BK.

[GettingGoing]

If your FHA mortgage was in your Bankruptcy, FHA expects that you will not only wait the 3 years until you can qualify again, but they also want you to pay them the money they lost in your transaction, and then wait 3 years prior to qualifying again through FHA. I am confused by the earlier post. If the mortgage is in the BK, you can't keep making payments on time and stay in the house. It sounds more like they are keeping the house and not including it in the BK.

Im confused by this statement. I have a FHA mortgage that will be discharged in my bk7 and I plan to continue paying my mortgage on time and stay in my house. Also wouldn't it be against the law for FHA to demand the money they lost with the discharged mortgage? I am not an expert by far but I don't believe you know what you are talking about.

[newbie2]

Im confused by this statement. I have a FHA mortgage that will be discharged in my bk7 and I plan to continue paying my mortgage on time and stay in my house. Also wouldn't it be against the law for FHA to demand the money they lost with the discharged mortgage? I am not an expert by far but I don't believe you know what you are talking about.

Agreed. That whole post made no sense at all.

[BKLending]

Im confused by this statement. I have a FHA mortgage that will be discharged in my bk7 and I plan to continue paying my mortgage on time and stay in my house. Also wouldn't it be against the law for FHA to demand the money they lost with the discharged mortgage? I am not an expert by far but I don't believe you know what you are talking about.

FHA is providing the funds for a new mortgage. If they lost money in the last time you both did business, they wont lend you money a second time until you have paid them back. They will also not lend you funds if you have ever defaulted on student loans. It is smart on their end, not fair, but smart. They feel you owe them money, even if the debt was included in the BK. They wont lend you money EVER again, until they are paid the money they are out from your last transaction. Even if you did pay them, they will then make you wait an additional 3 years from the time your check clears.

NOT TO WORRY. There are other options. VA or USDA are other options.

[GettingGoing]

FHA is providing the funds for a new mortgage. If they lost money in the last time you both did business, they wont lend you money a second time until you have paid them back. They will also not lend you funds if you have ever defaulted on student loans. It is smart on their end, not fair, but smart. They feel you owe them money, even if the debt was included in the BK. They wont lend you money EVER again, until they are paid the money they are out from your last transaction. Even if you did pay them, they will then make you wait an additional 3 years from the time your check clears.

NOT TO WORRY. There are other options. VA or USDA are other options.

Do you have anything to back any of these statements up? I have never heard of this and cant see how it could be legal considering the debt was discharged in bk. Also many of us are not eligible for VA or USDA loans. Its either FHA or conventional.

[krielly]

From the FHA Outreach Website, FAQs

What are the guidelines for borrowers with a previous mortgage foreclosure?


Answer
A borrower whose previous principal residence or other real property was foreclosed or has given a deed-in-lieu of foreclosure within the previous three years is generally not eligible for a new FHA-insured mortgage. However, if the foreclosure was the result of documented extenuating circumstances that were beyond the control of the borrower and the borrower has re-established good credit since the foreclosure, the lender may grant an exception to the three-year requirement. Extenuating circumstances include serious illness or death of a wage earner, but do not include the inability to sell the house because of a job transfer or relocation to another area.

Handbook 4155.1: 4.C.

[BKLending]

From the FHA Outreach Website, FAQs

What are the guidelines for borrowers with a previous mortgage foreclosure?


Answer
A borrower whose previous principal residence or other real property was foreclosed or has given a deed-in-lieu of foreclosure within the previous three years is generally not eligible for a new FHA-insured mortgage. However, if the foreclosure was the result of documented extenuating circumstances that were beyond the control of the borrower and the borrower has re-established good credit since the foreclosure, the lender may grant an exception to the three-year requirement. Extenuating circumstances include serious illness or death of a wage earner, but do not include the inability to sell the house because of a job transfer or relocation to another area.

Handbook 4155.1: 4.C.

Do you have anything to back any of these statements up? I have never heard of this and cant see how it could be legal considering the debt was discharged in bk. Also many of us are not eligible for VA or USDA loans. Its either FHA or conventional.

Divorce of a wage earner is also extenuating circumstance and Short sales also count the same as foreclosures.

Responding to GETTING GOING. I have worked on a loan such as you are looking for. HUD covers it under Deliquent Federal Debt in the hUD handbook 4155. here is an attached link from HUDs website. Question 3,4,5 and 6 specifically address the questions you have.

http://www.hud.gov/offices/hsg/sfh/faqs/atl1cre.cfm

To say the least, it is bad luck to have a FHA loan that you have to default on, but it does apply to any federal debt that has been defaulted on. The governement wants to be paid in full before they will lend you any more money. If it was a conventional loan that was included in the BK, you can qualify 3 years from the discharge of the BK. Then you will have no trouble getting an FHA loan, considering income and credit works to qualify you.

Hope this information helps some.

[GettingGoing]

Divorce of a wage earner is also extenuating circumstance and Short sales also count the same as foreclosures.

Responding to GETTING GOING. I have worked on a loan such as you are looking for. HUD covers it under Deliquent Federal Debt in the hUD handbook 4155. here is an attached link from HUDs website. Question 3,4,5 and 6 specifically address the questions you have.

http://www.hud.gov/offices/hsg/sfh/faqs/atl1cre.cfm

To say the least, it is bad luck to have a FHA loan that you have to default on, but it does apply to any federal debt that has been defaulted on. The governement wants to be paid in full before they will lend you any more money. If it was a conventional loan that was included in the BK, you can qualify 3 years from the discharge of the BK. Then you will have no trouble getting an FHA loan, considering income and credit works to qualify you.

Hope this information helps some.

All that tells me is that I must wait 2 years from a bk7 and 3 years from a foreclosure unless I can prove a hardship. I see nothing that says I will have to pay pack any money that was lost on my previous discharged FHA loan.

[becky20]

[QUOTE=GettingGoing;418284]All that tells me is that I must wait 2 years from a bk7 and 3 years from a foreclosure unless I can prove a hardship. I see nothing that says I will have to pay pack any money that was lost on my previous discharged FHA loan.[/QUOTE]


I agree, that's how I read it too - hope that's the case since we gave up our FHA financed home in our chapter 13 and are living in a house we would like to buy when we're able to qualify (based on the 3 year rule and considering the bank just took the house back in november, it'll be another 2 1/2 years...)

[dumpinmydebt]

I believe what BKLending is saying about FHA used to be correct (likely before the mortgage crisis), at least that's what my wife believes and she was a loan officer at that time. However, it does say Federal debts, but the only FHA related item HUD included in Federal debts is a Title I loan, which is an FHA home improvement loan or FHA construction loan. A Title II loan is the regular FHA loan you all are referring to.

[sick of debt]

What if you get a strong co-signer? Will that change the 3year timeframe?

[HHM]

What if you get a strong co-signer? Will that change the 3year timeframe?

I don't think so. The 3 year timeline is pretty hard and fast.