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pickleman773

Refinancing FHA to Conventional after Foreclosure

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In 2011, I sued BOA for RESPA violations and settled out of court with them which resulted in me agreeing to a foreclosure and a cash settlement. The foreclosure was finalized Jan 2012.

 

I've since purchased another home via FHA and would like to refinance via conventional mortgage. My FICO is 692. I recently tried with an internet lender and was denied at final underwriting because of the foreclosure waiting period of 7 years. I know Fannie Mae allows for extenuating circumstances but I was told I did not qualify even though I produced a copy of the lawsuit and settlement agreement. I personally think the lender just didnt want to deal with it.

 

Does anyone of any post foreclosre friendly conventional refinance lenders I can contact?

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As an underwriter I see this all the time. All the time, maybe hundreds of times. Incredibly rare to see an exception due to extenuating circumstances. They must be supported with satisfactory documentation, in this scenario, an agreement was made to foreclosure and their was a finding by court of RESPA violations, only a settlement agreement. Even if the settlement agreement stated lender was guilty of respa violations, which would be odd guilt is admitted in a settlement, it wouldn't necessarity validate an extenuating circumstance by FNMA or FHLMC. A complaint is not a verdict of guilt, only an allegation to a neutral third party and without a finding and documented verification of how that finding let to the inability to pay, it wouldn't document extenuating circumstances.

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Appreciate you're response. Good to read from an Underwriter which puts things in a better perspective for me. 😘

 

As an underwriter I see this all the time. All the time, maybe hundreds of times. Incredibly rare to see an exception due to extenuating circumstances. They must be supported with satisfactory documentation, in this scenario, an agreement was made to foreclosure and their was a finding by court of RESPA violations, only a settlement agreement. Even if the settlement agreement stated lender was guilty of respa violations, which would be odd guilt is admitted in a settlement, it wouldn't necessarity validate an extenuating circumstance by FNMA or FHLMC. A complaint is not a verdict of guilt, only an allegation to a neutral third party and without a finding and documented verification of how that finding let to the inability to pay, it wouldn't document extenuating circumstances.

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I have yet to see one happen - it usually takes a job loss which is out of your control or the death of someone on the loan -

Anything less is not considered -

 

If you have fha your rate should be pretty solid (based on the window of time you purchased) - even with the PMI it may be difficult to get a conventional rate that is low enough to justify the change -

 

Good Luck Moving forward

B

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Appreciate you're response. Good to read from an Underwriter which puts things in a better perspective for me.

 

As an underwriter I see this all the time. All the time, maybe hundreds of times. Incredibly rare to see an exception due to extenuating circumstances. They must be supported with satisfactory documentation, in this scenario, an agreement was made to foreclosure and their was a finding by court of RESPA violations, only a settlement agreement. Even if the settlement agreement stated lender was guilty of respa violations, which would be odd guilt is admitted in a settlement, it wouldn't necessarity validate an extenuating circumstance by FNMA or FHLMC. A complaint is not a verdict of guilt, only an allegation to a neutral third party and without a finding and documented verification of how that finding let to the inability to pay, it wouldn't document extenuating circumstances.

 

Welcome :) Really, extenuating circumstance are rarely rarely approved the documentation has to be clear, concise and reasonable the stated extenuating circumstance led to the f/c. I've known an underwriter fired after approved a f/c due to extenuating circumstance - did not document the circumstance satisfactorily, went to audit with FNMA and was sent to repurchase to the lender due to failure to substantiate the extenuating circumstance. They tried to rebut, but did not prevail. The extenuating circumstance was not really documented, and it shouldn't have gone thru by the guidelines. I think I've approved two extenuating circumstances to bypass the waiting periods, that is out hundeds. :blush:

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