Bank Owned Foreclosures

[SunnySideUp32]

Is it a good idea to house hunt through bank owned foreclosures? What things to look out for? Will paying a 5-year old and a 3.5-year old collection (both are on her credit report) in full hurt her credit score before applying for a mortgage if she does it a month or two in advance? Her scores are 698 to 708 across the board.

[Brian B The Loan Professor]

The credit should be cleaned up if there is time I dont know what it will do to the scores but it will make it easier to get through underwriting

Especially if they are high dollar amounts that may pursue a judgment and potential lien on the home - Underwriters dont like this.

Disputes should be resolved as well. I would go through and remove disuptes another thing that could cause problems with an UW.

 

B

[SunnySideUp32]

The credit should be cleaned up if there is time I dont know what it will do to the scores but it will make it easier to get through underwriting

Especially if they are high dollar amounts that may pursue a judgment and potential lien on the home - Underwriters dont like this.

Disputes should be resolved as well. I would go through and remove disuptes another thing that could cause problems with an UW.

 

B

What is your opinion on buying a bank-owned foreclosed house?

[Brian B The Loan Professor]

No problems with bank owned as long as it is in acceptable shape. When people lose their homes to the banks they sometimes thrash the property or steal the appliances etc. Some banks fix things up others want an as is sale. Loans require that the home be inhabitable so flooring, plumbing, heat and kitchen are all required..