Divorce - Foreclosure Question for Shane or Dallas Loan Guy

[moneystinks]

I'm in TX-  I have a foreclosure on my credit report from a house that was awarded to my ex-husband in 2005. The foreclosure is dated 2/13. I had no idea there was a foreclosure on there until I checked my credit report earier this year in preparing to buy a house early spring 2015.   My question is, since I have the divorce decree that states I wasn't responsible, and I haven't lived in the house since February 2005, will an underwriter approve?

I've tried and tried to get it removed, no such luck.  I just sent a letter today begging them to remove, but I'm not holding my breath!    

[youshallcallmedragon]

Is/was the mortgage note in both your names? Even if it was, the responsibility of your ex to get it refinanced, it will still be held againist you if it foreclosed. If you weren't on the note, just the deed, then most likely it won't count against you. However, in that case you probably wouldn't have it on your credit report either..

[ShanetheMortgageMan]

With FHA, a lender may grant an exception to the three-year foreclosure waiting period requirement if the foreclosure was the result of documented extenuating circumstances that were beyond the control of the borrower, such as a serious illness or death of a wage earner, and the borrower has reestablished good credit since the foreclosure.  Divorce is not considered an extenuating circumstance. An exception may, however, be granted where a borrower’s mortgage was current at the time of the borrower’s divorce, the ex-spouse received the property, and the mortgage was later foreclosed.

So it sounds like a case could be made in your situation.

[moneystinks]

Well that's good news then!  Do you recommend that I go ahead and get approved in underwriting before I try to put an offer in on a house so its not delayed?   I'm rebuilding my credit because of this and a couple of lates from 2 years ago. However, I've had perfect on-time payments for 2 years and am just at 619 myfico median score, so am hoping to get that bumped up before February of next year. My lease is up in April and I would really like to try and buy. I'm tired of renting.

[ShanetheMortgageMan]

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@moneystinks wrote:

Well that's good news then!  Do you recommend that I go ahead and get approved in underwriting before I try to put an offer in on a house so its not delayed?   I'm rebuilding my credit because of this and a couple of lates from 2 years ago. However, I've had perfect on-time payments for 2 years and am just at 619 myfico median score, so am hoping to get that bumped up before February of next year. My lease is up in April and I would really like to try and buy. I'm tired of renting.

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Definitely.  I'd recommend you look get pre-approved in December or January.

[moneystinks]

Just wanted to update  - went to a Mortgage Broker the week after Christmas with documentation for everything.  I had researched and had any and all documentation (and probably plus some) that they might need. I had also written letters of explanation, etc.  I was a little nervous because my scores here on myfico.com were in the mid-620's across the board, but didn't think it would be high enough.  I presented her the situation of the foreclosure, etc. and allowed her to pull my credit report.  To my surprise, the scores were higher than here (thank goodness) and my mid score was 647!   Anyways, I had to show from rental verfications, etc., that I was not living in the house at the time of the foreclosure, my divorce decree, cancelled checks for rent (I had them all) and obviously everything else that is usually asked for.

I got a call yesterday that I'm fully approved for a loan, with no conditions (other than house conditions when I find one, title, appraisal, inspection, etc.).  So excited!   Now  begins the adventure and the hunt for a house! 

[frugalQ]

congratulations to you!!

[Anonymous]

Well done.

[Anonymous]

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@moneystinks wrote:

Just wanted to update  - went to a Mortgage Broker the week after Christmas with documentation for everything.  I had researched and had any and all documentation (and probably plus some) that they might need. I had also written letters of explanation, etc.  I was a little nervous because my scores here on myfico.com were in the mid-620's across the board, but didn't think it would be high enough.  I presented her the situation of the foreclosure, etc. and allowed her to pull my credit report.  To my surprise, the scores were higher than here (thank goodness) and my mid score was 647!   Anyways, I had to show from rental verfications, etc., that I was not living in the house at the time of the foreclosure, my divorce decree, cancelled checks for rent (I had them all) and obviously everything else that is usually asked for.

I got a call yesterday that I'm fully approved for a loan, with no conditions (other than house conditions when I find one, title, appraisal, inspection, etc.).  So excited!   Now  begins the adventure and the hunt for a house! 

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@moneystinks,

Excellent work on doing your homework and getting approved.  Keep us posted when you finally close.

[Gunnar419]

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@moneystinks wrote:

Just wanted to update  - went to a Mortgage Broker the week after Christmas with documentation for everything.  I had researched and had any and all documentation (and probably plus some) that they might need. I had also written letters of explanation, etc.  I was a little nervous because my scores here on myfico.com were in the mid-620's across the board, but didn't think it would be high enough.  I presented her the situation of the foreclosure, etc. and allowed her to pull my credit report.  To my surprise, the scores were higher than here (thank goodness) and my mid score was 647!   Anyways, I had to show from rental verfications, etc., that I was not living in the house at the time of the foreclosure, my divorce decree, cancelled checks for rent (I had them all) and obviously everything else that is usually asked for.

I got a call yesterday that I'm fully approved for a loan, with no conditions (other than house conditions when I find one, title, appraisal, inspection, etc.).  So excited!   Now  begins the adventure and the hunt for a house! 

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Congratulations and thank you for returning to update your situation.

A lot of people have damaged their own credit, but there's a special hell in having to deal with credit that's been damaged by an ex. It's great that you were able to overcome the problem and great that you were able to get help both from your own research and MyFico's amazing mortgage mavens. We're so lucky to have them here. Thank you Shane! And thank you Dallas and startingover and any other mortgage pro I might be forgetting to mention..