buying a home after foreclosure and bankruptcy

[reboundgirl]

In 2004 I filed Bankruptcy and lost a home to foreclosure. Do I have to wait 10 years before I will ever be able to buy a home again? Thank you for any assistance you can give me with my question?

[Brian B The Loan Professor]

Hi Rebound - welcome to the forum

 

If you have re-established your credit and had ZERO lates since the BK you should be fine for an fha loan now. Of course if all else qualifies. Your credit after BK has to be spotless. The time frame for a BK is 2 years and foreclosure 3 years.

 

Hope this helps

Brian

[cedski]

The guidelines Brian mentioned will be changing.......effective August 1.....So if you want to buy a house you need to get an application in prior to that or you will fall under the new guidelines.

 

Revised

Guidelines

Changes to the Fannie Mae Selling Guide regarding:

• Bankruptcy and Foreclosure

• Conversion of Principal Residence

• Revised Property Value Representation and Warranty

Bankruptcy

and

Foreclosure

For manually underwritten loans

Bankruptcy

• Updating the requirements communicated in Fannie Mae

Announcement 08-08 to apply to the discharge or dismissal date of

the bankruptcy

o All bankruptcies, except Chapter 13, required time period to

reestablish credit is four (4) years from date of discharge or

dismissal.

o Chapter 13 requires a minimum of two (2) years from the

completion and discharge. This two year time period takes

into consideration that the borrower reestablished credit

while making payments in the Chapter 13.

o A borrower who was unable to complete the Chapter 13

plan and received a dismissal, however, will be held to the

four (4) year time period from the dismissal date for

reestablishing credit.

• Borrowers with multiple bankruptcies in the past 7 years

o A five (5) year elapsed time period is now required to

reestablish credit from the most recent discharge or

dismissal date for borrowers who have more than one

bankruptcy filing in the past 7 years.

• Preforeclosure Sales (Short Sale)

o A preforeclosure sale involves the sale of the property by

the borrower to a third party for less than the amount owed

FNMA Ann. 08-16 Page 2 of 3 Credit Policy Announcement 08-23

Bankruptcy

and

Foreclosure,

continued

to satisfy the delinquent mortgage as agreed to by the

mortgage lender . A two (2) year elapsed time period for

reestablishing credit following completion of the action is

required.

Please refer to the Fannie Mae Announcement 08-16 for additional details

and a comprehensive grid relating to the minimum elapsed time period

before the borrower has demonstrated they have reestablished an

acceptable credit history.

Effective for applications dated on or after August 1, 2008.

Conversion of

Principal

Residence

Borrowers who currently own their home typically have three options

when they decide to purchase a new principal residence. They can

• Sell the property

• Convert the property to a Second Home

• Convert the property to an Investment property

Conversion to Second Home

• For manually underwritten loans the borrower must qualify for the

entire PITI payment and must have at least 6 months PITI reserves

for both the new primary residence and the second home

o If the borrower has 30% equity in the existing property

(documented with an appraisal, AVM or BPO, minus

verified outstanding liens) then 2 months reserves will be

sufficient

• For DU underwritten loans

o The borrower must qualify for both PITI payments but DU

will determine the level of reserves required

Conversion to Investment Property

For manually underwritten loans:

• If the borrower has 30% equity in the existing property

(documented with an appraisal, AVM or BPO, minus verified

outstanding liens) then the borrower may use 75% of the rental

income to offset the mortgage payment in qualifying.

o Rental income must be documented with:

􀂃 A copy of the fully executed lease and

􀂃 The receipt of a security deposit from the tenant

deposited into the borrower’s account

• If the borrower does not have 30% equity in the existing property

then rental income cannot be used to offset the mortgage payment.

The borrower must qualify for the entire PITI payment and must

have at least 6 months PITI reserves for both the new primary

residence and the investment property.

FNMA Ann. 08-16 Page 3 of 3 Credit Policy Announcement 08-23

Conversion of

Principal

Residence,

continued

For DU underwritten loans:

• The same requirements apply, except for the reserve

requirements; DU will determine the level of reserves needed.

• If the borrower does not have 30% equity in the existing

property and must be qualified with the entire payment then no

rental income should be entered in DU for the existing property,

since this requirement must be done as a manual overlay.

Effective for applications dated on or after August 1, 2008.

Revised

Property Value

Representation

and Warranty

Fannie Mae is expanding their requirement for representation and warranty

for seasoned loans sold to them. We do not sell seasoned loans to Fannie

Mae.

Effective for loan deliveries on or after August 1, 2008.

[resqume1]

Wow- 4 years from bankruptcy...is this for all loans (including FHA, VA, USDA) or is this just conforming?

[CallMeJo]

Wow, cedric. knew it had to be coming, but didn't think it would be this year.

 

as to:

 

• Preforeclosure Sales (Short Sale)

o A preforeclosure sale involves the sale of the property by

the borrower to a third party for less than the amount owed

FNMA Ann. 08-16 Page 2 of 3 Credit Policy Announcement 08-23

Bankruptcy

ande

Foreclosure,g

continued

to satisfy the delinquent mortgage as agreed to by the

mortgage lender . A two (2) year elapsed time period for

reestablishing credit following completion of the action is

required.

 

 

Does this mean that someone who short sells will have to pay back the difference between the sale price and the mortgage + 2 yrs post short sale before they can qualify again for a new mortgage?