Less than 1 month away from 2 years

[rsteinbacher]

Our 2 year mark is Jan. 6, 2010. We are working on financing a house. We DID NOT foreclose our old property, it was relinquished back to the bank (deed in lieu of foreclosure).

Our current mortgage company is telling us that FHA considers a deed in lieu to be a foreclosure and that we have to wait 3 years before we can get a mortgage.

It seems like the mortgage industry is making up the rules as they go along. When we filed, the time for obtaining a new mortgage was 2 years. then all this mortgage mess happened and now it's 3-7 years? Why would we be included in that "new time line"? shouldn't we be grandfathered or something?

We are very angry since we worked very hard at re-establishing our credit (both now over 690) and we are being told NO!

Comments please

[LimpDisc]

Have you only tried the FHA mortgage option?

[rsteinbacher]

As of now, yes.

[screentest]

I don't know if this helps or not but from my experience and comparing all lenders, FHA is still the most liberal when it comes to a new mortgage. The requirements for a new mortgage are changing again; however with FHA it will involve tweaking the minimum credit score from 580 to 620 it seems. FHA underwriters I have talked to still say 2 years post BK ONLY and/or 3 years post DIL, Short Sale or foreclosure for new mortgage consideration. (The mortgage industry, according to everyone I have talked to about this, looks at all three of these events as a foreclosure no matter what some smiling mortgage sales person tells you) The 3 year wait for a new mortgage begins when the foreclosure, or legal transfer of title, is complete not when the first payment is missed or the mortgage is discharged in BK.

Many of my friends and neighbors have been waiting to get a foreclosure finished for over 2 years now so their 36 month clock hasn't even begun yet.

The other mainstream lenders are also, I understand changing their requirement to, in some cases, 7 years post foreclosure depending on the type. (Strategic default, hardship etc.)

Personally I would not deal with mainstream lender (Fannie/Freddie) ever again so they can choke on their new requirements. Best you can do is wait it out another year, save and keep doing what your doing. You WILL get into a new mortgage. Someone is always willing to do business with you!

Good Luck
ST