One Broker Says YES another Says NO???Confused

[whoops08]

We are 2 years out of CH. 7 BK. Home IIB, shows on credit as IIB paid as agreed. Name on mortgage was in my husbands name only. But live in state of CA ( community prop state). Bank foreclosed on home one year after discharge. in Aug. 2009.

Spoke to two different brokers and got two different answers.

One broker says Yes as of two year discharge date. Can qualify for FHA. our credit scores are in the 650's and we have a down payment and stable jobs. He said at the very least I could qualify on my own since I was not on the loans.

another broker says NO and that we will have to wait until 3 years after the Aug. 2009 date due to CA being a community prop state.

Called FHA and they had no idea.

Is there anyone going through the same thing and had any success?

thanks in advance

[Logan]

They may both be right. It's possible that the first guy can do it in 2 years and the 2nd guy can't.

Were you on the title for the property? If not there may be no way that anyone would know about the foreclosure and you could get the loan.

[SMinGA]

Agree with Logan - they may have different lenders/loan programs in mind. But was the one who said YES aware of the foreclosure?

[HHM]

In today's environment, you will have a hard time getting any mortgage within 3 years if one spouse has a foreclosure. It is very difficult to have only one spouse "qualify" on their own.

All you can do is start going through the pre-approval process. If the broker that said yes can actually get your pre-approved, great.

[Logan]

In today's environment, you will have a hard time getting any mortgage within 3 years if one spouse has a foreclosure. It is very difficult to have only one spouse "qualify" on their own.

All you can do is start going through the pre-approval process. If the broker that said yes can actually get your pre-approved, great.

HHM,

If the wife is not on the loan or title how would the lender know?

Logan

[Ugh07]

The Underwriter will want to know where the wife has been living the last 2 years and when they find out it is in a house that is being foreclosed on they may have a problem with that.

Nothing wrong with moving forward with the preapproval though, see what happens and let us know.

[Logan]

The Underwriter will want to know where the wife has been living the last 2 years and when they find out it is in a house that is being foreclosed on they may have a problem with that.

Nothing wrong with moving forward with the pre-approval though, see what happens and let us know.

I doubt this would be a factor since they were foreclosed upon a year ago. Yes, you'll have to put down 2 years worth of addresses but you only need to show 12 months of deposits or get a verification a rent from the landlord.

Will the underwriter check the previous resident for a foreclosure? Maybe, maybe not.

This person needs a broker with an in house underwriter.

Logan

I'm assuming she was not on title.

[Ugh07]

When they fill out the application they will be required to disclose where they lived the last 2 years and whether or not they owned or rented. Once they check the box for "owned" that will trigger the underwriter to ask for a disposition of that property. Once they say foreclosed it may become a problem.

[Logan]

When they fill out the application they will be required to disclose where they lived the last 2 years and whether or not they owned or rented. Once they check the box for "owned" that will trigger the underwriter to ask for a disposition of that property. Once they say foreclosed it may become a problem.

This is certainly a gray area. If you're married and you buy a house with the loan in the husbands name is the wife liable?

Can the lender have a judgment against the wife?

It may depend on the foreclosure laws in California but I think she can get a loan.

Logan

[HHM]

Underwriters are very nit-picky; I had to write a letter explaining a 4 month period of unemployment, it was easily explainable because I moved from 1 city to another, but it was only 4 months.

I always love this response in these threads..."how will they find out"...they will ask.

Ugh07 is right, the Uniform Mortgage Loan App requires a 2 year residence history. Ultimately, the disposition of that home will be inquired about and need to be explained. So, even if the husband is not on the app as co-borrower, the foreclosure will likely be found out; and even though FHA guidelines "allow" for a mortgage 2 years after BK discharge, that is still a red flag that will create more scrutiny on the file.

The only way this even has a shot of working is if the wife can qualify on her income alone, if she can, then she is in the ball park and "might" be able to get a loan, but I just think that once the underwriter finds out about a foreclosure of the "spouse", I think the game is over.

[Logan]

I spoke with one of my old account executives last night for one of my lenders and he said he could do it as long as the income and assets are good with a decent credit score.

I wouldn't expect all lenders to accept this but some will.

Logan

[whoops08]

ok just an update...a broker that we have been working with just said that he submitted our file and the financial portion was approved but the credit portion was not and that we had to wait until Oct as that is the 2 year point since the discharge (july was our file date). He said once October comes around that we should have no problem being approved. He said that the underwriter saw that we had a home IIB and still approved with just the 2 year mark condition. We are skeptical but hopeful. Will keep you all posted.

[sick of debt]

Happy news for you. Our 2 yr discharge date is 12/10, but the 3 yr mark on the foreclosure is 8/11. Are you going the FHA road? Is there anything you did to help this along (rebuild credit etc)

[whoops08]

Hi, we spoke to our broker again and verified with him that he actually did submit our file to underwriting and they saw the whole picture. He said YES, he got the approval from FNMA.. and that as soon as October hits we will be approved. We did rebuild credit immediately after bk, we bought 2 cars (small car loans) and opened two credit cards each and paid each month for reporting purposes. Our credit isn't that great still but meets the requirement of 640 mid score. We aren't getting too excited yet as we know that things could change instantly. We'll see in October, will keep everyone posted.

Thanks!

[Ugh07]

you sure he said it was a fannie mae(FNMA) approval? Fannies guidelines call for 4 years after BK. Im thinking this would be an FHA loan.