FHA loan after bankruptcy & foreclosure

[Anonymous]

Good evening Cashisbetter. Can you provide the lender you used to get a loan? I am in the same situation. I had a BK in 2009/ Discharged in 2009 and gave the house back to lender (did not reaffirm house). The house did not foreclose until this year and I have explained to several lenders that I had no control over when the property foreclosed. If they would use my BK discharge date, I would be able to purchase a home now. Thanks, mgray27

[chasmith]

This is one of the giant inequities in the mortgage mess.  FHA has firm guidelines requiring 2 years from Chapter 7 discharge or 3 years from foreclosure/short sale/deed-in-lieu, whichever is later.  And it's the date the deed transfers out of your name in foreclosure that counts, so when the bank finally gets around to taking the property the three year clock starts.

Conventional lenders generally follow even longer timeframes, and again since the foreclosure clock starts at deed transfer you'll be stuck there too.

The deck is stacked against the borrower by the mortgage lenders, it's that simple.

[Anonymous]

Hi my husband and I Bk 7 and included the house in April 2009 due to extenuatingcircumstances my husband became ill to the point of dissability.  We have a 667 score, good reserves. A morgage broker in Ga. denied our loan because the bank has not taken it over yet. FHA shows no Caivrs but they called Citi and denied us.  Can anyone give me the name of a lender who can do business in GA that will accept the BK date.  In Fl banks are taking YEARS to foreclose.  Thank you.

[Anonymous]

First of all, after filing chapter 7 all loans are discharged.  There should be no foreclosure on your credit report and if there is, your attorney should request they promptly remove it or face a lawsuit!  Second, because the loans are discharged, FHA should be 2 years.  Your lender getting around to foreclosure process in order to take title back is their choice and if it takes them 1-2 years, it should have bo bearing on the individuals ability to borrow.  Thats a bunch of crap!!!

[Anonymous]

I apologize for the delayed response to many of the older posts. We have just passed the date that made it 4 years after our discharge. We have been in our home now for 2 years in October 2012.

Allied home mortgage did our loan for us. There was a local branch in our state, and the underwriter was in Texas.

Again, because at that time FHA guidelines only outlined two distinct circumstances ( chapter 7 and foreclosure), the bank didn't interpret that as a combination of the two, they only chose to follow the bankruptcy guidelines.

In hindsight, I could see why a bank would use a combination of the two since Allied has since been sued by the federal government. I'm going to be blunt and please don't take offense, but I got into my situation because I was a big risk taker, and very wreckless with money and credit.

I know how you feel and I truly feel for ANYONE who went through the humiliation and despair that we went through. But, please don't let emotion override logical thought as you go through this process. 4 years went by in the blink of an eye! Good luck!

[StartingOver10]

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@Anonymous wrote:

First of all, after filing chapter 7 all loans are discharged.  There should be no foreclosure on your credit report and if there is, your attorney should request they promptly remove it or face a lawsuit!  Second, because the loans are discharged, FHA should be 2 years.  Your lender getting around to foreclosure process in order to take title back is their choice and if it takes them 1-2 years, it should have bo bearing on the individuals ability to borrow.  Thats a bunch of crap!!!

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It's not that the f/c appears on the cr report. It's that the lender will not give a new mortgage until three years has elapsed from the time the deed was transferred back to the bank (or in the case of short sale three years from the time the deed goes to the new buyer).  So you can jumpstart the process by short selling the house right after your BK discharge if you so choose. The bank will check the public records to see the status of your home after your BK and exactly when it transferred.

As to the above part in bold, it's not that it has a bearing on the individuals ability to "borrow" - its the risk profile the bank is looking at for the new loan. FHA has guidelines to insure the loan. In order for the bank to get the loan insured the borrower must meet those guidelines.

[Anonymous]

HI very new to this.Trying to get a loan myself but i get 3 different dates! Can anyone help and sorry for any inconvience,thanks dw1188

[dmyer2010]

I am in the process of shopping for a mortgage. My bankruptcy which included three mortgages was discharged January 11 2011. I'm not sure of the dates each mortgage was foreclosed. Do underwriters use the date the home transfers into the name of the bank or do they use the date the bank transfers title to the new owners? I have a unique situration as I am trying to get pre approved for a presale home which will not be complete for 5 to 6 months. Will the banks pre approve me now for a closing that will occur several months from now or do I have to wait to apply for a loan at the two or three year mark which ever is later? 

[chasmith]

I had a BK but no foreclosure.  No lender would start an application until two years had passed from my discharge.  I doubt they'll start the application until the greater of two years from BK discharge or three years from the deed transfer in foreclosure.

It's my understanding that the rule for foreclosures is three years from the date the deed is transferred out of your name - whether to the bank or a new owner.  So if the deed was transferred to the bank you're (sort of) in luck, many folks have banks just sitting on the property without taking title.

[co791]

CHASMITH is correct on the foreclosure.   Fair warning, I was 4 years Post foreclosure and still got scrutinezed despite meeting all the underwriters criteria. Delayed me a whole month. Started Loan process on June 15th, Closed on Sep 11th.  Not easy!  Best of luck to you!