Am I Free???? No More "Foreclosure Started" on CR

[Anonymous]

Late last year, my husband and I were looking to purchase a home through an FHA.  My scores were around 640 so I knew I had a chance.  However, I found out through the lender's pull that my EQ report listed my mother's mortgage (that I co-signed over 20 years ago) with a "foreclosure started", TU didn't list the mortgage at all, and EX listed is with 120 days late.  Long story short, the house was not foreclosed.  My mother  was hospitalized and was able to get things straightened out right after Chase issued a Notice of Default.  Anyway, I wrote a GW to Chase and now EQ has deleted the mortgage entirely and EX says the mortgage has been current for the past 7 years -- plus the Default is not on my credit report.

This is good news.  However, the Notice of Default remains accessible (although there was a Notice of Cancellation/Rescission filed within 20 days) and I am afraid if I pursue a mortgage loan, my name will come up with a prior Default during Title - Public Records or CAIVRS ... like a judgment would.  

Any thoughts.  This is such a odd situation.  I am in California.  I would appreciate any feedback.

[JM-AM]

See if the bank will give you something in writing. 

Get copies of the notice of cancellation/recission.

Stop in and speak to a LO or a Broker and explain your situation and see what advice they give you.

What type of loan are you looking to get?

How much home are you looking to buy?

How much of a down payment are you putting down?

What are your incomes?

If they include your co-signed loan with your mom what is your DTI like?  Would you still qualify?

These are just a few questions you need to consider. Each loan program has advantages and disadvantages, As far as foreclosure status I believe you will be okay with good documentation. Most likely they will look it all up and verify what you tell and show them.

[Anonymous]

I was looking to go FHA, but my husband has a recent BK and we were just using my income/credit and rent out our current home.  I am looking for put down 10% on an $250k loan.  My income is $70k/year.  I looked at all the financial qualifiers ... it's just that evidence of a default on the co-signed mortgage that  frightens me.  A couple of lenders said if I could prove that all the mortgage payments are made by my mom (basically, a copy of her checking account reflecting payments for 12 months) that the mortgage debt could be excluded.  I have the Cancellation/Recission, but wouldn't the Default Notice still appear when it goes to Title?  

[JM-AM]

As long as it can be verified you should have no issues. Now Im not saying it wont cause delays, but it may. 

Yes they are correct in saying it could be excluded, but the highlighted word there is "could".

Is current home in both names? Husbands name? Your name? Is home currently being rented out? Current home payments may have to be included in your DTI also. 

Im sure you will have a few hoops to jump through, but personally I think your DTI is going to be your biggest hurdle. 

When your figuring out your DTI you have to factor in everything, then eliminate things from DTI as you feel most probable not to be included. But you always have to know worse case and best case scenario and have an idea what you would or wouldnt qualify for according to your DTI.

[Anonymous]

Thanks for your input JM-AM.  Our current home is just in my husband's name only.  I was told if I go FHA I would have to include the debt from my husband's mortgage (he doesn't have any CC or Auto loans) but I could not claim any potential rental income. BUT if we moved out and rented the home for 6-12mos, then I could claim the income.  We file joint taxes, so technically it doesn't matter if I claim the entire portion of the income.   There are so many factors to consider that my brain is spinning!!

Not to spin off on a different note, but we also are considering moving into the rental home (for which I am a co-signer), refinancing it and taking an additional $50-$60k in funds to repair and renovate it.  That home currently has $200k in equity.  If we repair/renovate it, it has potential to have another $100-$150k in equity.  

Decisions, decisions.