Foreclosure and FHA Loan Qualifying

[JustDo]

Live in CA, Home included in Chapter 7.
Discharged April 2009
Bank didn't take title (foreclose) on home until July 2011 !!!

I have had lenders tell me:
1.) That the 3 year waiting period for FHA loans begins when and ONLY when the bank takes title back on the home.

And

2.) I've been told that as long as I didn't live in the home or make payments, the 3 year waiting period ABSOLUTELY begins on my discharge date.

I contacted FHA and they told me that they cannot give me a definate answer to the question and that I need to contact a lender. Grrrr.

Obviously, in my case, the answer to this question makes a major time difference in getting back into a home. Any help from fellow BK Forum users will be much appreciated. Thanks.

[HHM]

Unfortunately, the answer is #1.

That is the rule.

Now, you can "try" to use #2 as an argument for special circumstances to get a waiver, but the rule is, 3 years from the when the home legally changes ownership, which only occurs when title is transferred.

Sorry.

[JustDo]

Thank you for the answer. That is the answer I have gotten from most of the lenders I have talked to except for one who was absolutely adament that if I didn't live in the house or make payments post discharge, the 3 year waiting period would start on discharge date.

Very frustrating since there may not be any way to find out for sure until my potential home loan gets into it's final stages.

[katt3344]

The HUD guidelines say 2 years from discharge date. However, we are in the same boat as you it sounds like and I just had a very serious conversation with the new mortgage broker on a house we have put a deposit on and he explained to me what is happening. Basically, FHA wont insure any loans where someone has a previous foreclosure or DIL or short sale in the past 3 years. Same for BK. So, even though we were discharged in the last 2 years, because the bank has not yet foreclosed and we are still in the house, they wont approve the new mortgage until 3yrs. Because, he says, HUD released an "OPINION" that it is not recommended to issue any new mortgages for 3yrs when someone has a previously defaulted loan, FHA or Conventional. And because they had issued loans prior to this, and after closing FHA refused to back the loans, the banks and mortgage co's are all now following HUD's opinion. However, if the bank decides to foreclose before we close on our new house, our waiting period starts over from THAT date and not our discharge date. So we are in quite a quandry because we are trying to close on a new const house March of 2012, still living in the BK house and the bank filed Lis Pendens Aug of 2011. So now we are going to mediation in Dec. So we shall see. At this point just trying to stall the foreclosure till after we close on the new house. Only problem now is finding the money to pay an atty. Everything we were saving is for closing costs. Good luck to you! I hope it all works out!