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Established Contributor
medicgrrl
Posts: 703
Registered: ‎03-23-2009

Re: FHA loan after bankruptcy & foreclosure

It's not the lenders that make the rules for FHA.  This is and has been an FHA guideline for a long time.  The only way to get around the 3 years is if there were extenuating circumstances such as death of one of the homeowners or a major medical issue that caused you to lose the house.  Job loss, divorce, etc are not going to be considered extenuating circumstances to get around this rule.  You would basically have to have a major catastrophe to get around the FHA guideline.  I would imagine people affected by major natural disasters would probably also be allowed to receive an exception.  What occured that caused the house to go into foreclosure?  I am assuming by your previous post that the BK was only done to try and keep the house out of foreclosure?
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New Member
cjs2495
Posts: 5
Registered: ‎04-24-2009

Re: FHA loan after bankruptcy & foreclosure

Okay, I am going to wrap my replies all into 1. I have no confusion as to whether we were foreclosed upon or not. We most definitely were foreclosed upon, local circuit court proceeding, case no. and all. What I meant by included in the BK was that the debt was included in the BK, as in we did NOT reaffirm the home loan (since it was truly a junk loan). The reason for both the foreclosure and BK was due to the fact that our loans reset to an unmanageable level (up almost an additional $1500 mth) and the lender would not even consider working with us in any fashion (Countrywide). At the time we were told that there were no "workout" programs for people in "(our) situation". My husband and I talked to them on the phone practically every day for months, both before, during and after the BK was final, but the lender was uninterested or unable to figure anything out, so we did not oppose the foreclosure and it went rather quickly actually. I guess we will just have to wait until our 3 yrs are up or guidelines change, etc.

 

Does anyone know, per the guidelines, if the Final Judgment date (of foreclosure) is used or the sale date of the property (which of course adds a few months of waiting)?

Regular Contributor
LYNNY47
Posts: 133
Registered: ‎03-28-2008

Re: FHA loan after bankruptcy & foreclosure

My credit report lists my foreclosure as 8/07 and the date of the foreclosure was 8/16/07 and the house was sold in 2/2008.  This August or September 2009 will be 2 years but on my credit report it says on the bottom foreclosure started but the truth is that there have been new owners in the house since 2/2008 so I would think that would be updated but it is not.  I am wondering if there is something that I have to do such as contact the lender to update the credit report.  I had a very hard time with this because I know we should of never allowed this to happen but I tried to work it out with the bank but whatever I had they kept wanting 5-6,000.00 more then I had so in the end I could not do it so we had to let the house go.  Over the last 2 years I have changed a great deal in knowing that I will never own anything that I am not sure I can afford and never put myself in that position again.  I take full responsibility for it but one day I would like to own another house and just wondering what our chances are and when we would be able to do this if ever.  Some people have told me you have to wait until it is off your credit report but I don't know that is correct.  I was told that after 2 years it would not impact us as negatively but then I see some people have to wait 3-5 years. Just wondering if anyone knows what the true guidelines are.  Would appreciate any information anyone can give me.  thanks.

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Frequent Contributor
deemac
Posts: 388
Registered: ‎09-09-2008

Re: FHA loan after bankruptcy & foreclosure

FHA requires three years from the date the house was sold. In most cases it's easy for a lender to look up that date, regardless of what is shown on the credit report.

 

Conventional loans have a longer wait. USDA Rural Development will issue loans earlier if the rest of the credit profile is strong and your income and location qualify.

Established Member
raisemyfico800
Posts: 15
Registered: ‎03-06-2008

Re: FHA loan after bankruptcy & foreclosure

I am in the same boat as you. I filed Ch 7 , d/c on 2/08, to get rid of my house cos my ex was living in it and i was still paying half the mortgage. Lucky for me, my mortgage company sold my house on 10/08. This adds another 8 months to my wait. I will be eligible for another fha loan by 10/11. I did consider trying for a USDA loan, but i think i will wait, save more money so that i can eventually buy my dream home, like the one i left behind... Good luck to you.

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New Member
CashIsBetter
Posts: 4
Registered: ‎09-04-2010

Re: FHA loan after bankruptcy & foreclosure

I searched all over the net for this for two years, and the bottom line is, it is up to lender discretion as to how they translate the FHA guidelines. FHA experts will never give you a direct answer (or they couldn't give my wife and I one after multiple calls during over the course of 2 years) because the answer is not black and white. Our home was listed on our credit reports as included in bankruptcy. Our prequalification came back with an approved eligible.

 

We included our home in our chapter 7. We turned our home back over to the bank because we could not afford to reaffirm the debt. We filed in May of 2008, and were discharged in August of 2008. These were the absolute worst two years of my life, and if you are considering bankruptcy, take that statement with you and heed the forewarning! The humiliation and shame you bring upon yourself and your family is NOT worth it if you can avoid it (some of us could not, and that is why I am in the situation I am in - it's something that will follow you forever)! But, I digress...

 

We spoke to lender after lender and everyone told us 3 years with the exception of 2 lenders. We discussed our situation with them, we had both of them take our situation to their respective underwriters, and both of them came back with a yes they could get us the loan. My FICO is 688 two years after my chapter 7 and my wife

s is around 667. I am typing this up from my new home we closed on last Tuesday.

 

I know this thread is as old as the hills and I hate to beat a dead horse, but i want to encourge those of you who are in similar situations to remain persistant. Ultimately in 7 years my wife and I want to have a FICO of 0. Because who needs credit when you can pay with cash? Hope this was helpful!

Valued Contributor
mauve
Posts: 2,487
Registered: ‎02-18-2010

Re: FHA loan after bankruptcy & foreclosure

You plan that in 7 years you will re-write history such that you had paid off your new mortgage in 2007?  (That's what you would have to do to have no credit score in 7 years).


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New Member
CashIsBetter
Posts: 4
Registered: ‎09-04-2010

Re: FHA loan after bankruptcy & foreclosure

Awesome, thanks for pointing that out and demonstrating your awesome personality in the process.. That statement should read, we plan to be debt free in 7 years and working towards a FICO of 0. Good luck with your pursuit of an awesome Credit score.
New Visitor
justvisting
Posts: 1
Registered: ‎10-30-2010

Re: FHA loan after bankruptcy & foreclosure

I just want to say thanks for sharing your experience.  I've just started the whole process and am also getting conflicting stories from lenders on the FHA loan date availability.  My bankruptcy was dc 11/07 and the home was finally put into foreclosure 2/2008 and sold in a sheriff's sale 9/2008 but the auditor's website is showing 11/08.  What a real mess. 

 

It's good to know that there is light at the end of this really long dark tunnel.   I'm happy to see that you are doing so well and wish you luck on your journey to your perfect FICO score. 

New Member
hopemdavis
Posts: 1
Registered: ‎10-22-2009

Re: FHA loan after bankruptcy & foreclosure

You can go FHA after 2 years discharge.  My discharge date was 7/09/08 and I purchased my home on 9/16/10 with a FHA loan.  My loan officer said their are no differences in the underwriting requirements.  The only thing they may do is a manual underwriting which takes more time. 


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