Please - My Plan & Your Thoughts

[Hopelives2]

In reviewing my credit files last night, I found the last date of my mortgage was 9-9-09.  That is the last date reported, and the date of the sheriff''s sale.  To make a very long story short, I was told by Wells Fargo in writing they were reviewing my mortgage for refinancing prior to that date and would stop the sheriff's sale. 

In November 2009, I was sent a letter by Wells Fargo stating that my loan had been re-written and that I now had a new amount owing, substantially less than what it was and also, coincidentally, what I'd said I could pay.  The letter also asked for my insurance verification and I sent that in.

The letter said the first payment on new mortgage was due January 1, 2010.

On January 4th, I was at the bank to pay the mortgage, was subsequently pulled into a mortgage manager's office and told that rather than accepting payment for my new loan amount he had the sad task of telling me, I'd been foreclosed upon and had less than 45 days to move.

Stunned.

It got worse.  But that is not my point, just background info for my next question.

I turned over the keys to my house on 5-9-10.  I presumed that would be the date my three-year statute would follow.  However, that date appears NO WHERE on my credit files, just the 9-9-09.

So, if I understand correctly:  my three years post foreclosure time clock started on 9-9-09 and I only have 15 months until I could conceivably apply for a new home loan???

If so, OMG OMG OMG OMGOMG OMGOMGOGMOGMG.

If not, and the date is 3 years past the 5-9-09 date, then it is really no different than I originally thought.

Which is it most likely?

My Plan:

I can easily put away $3k a month if not more.  In 15 months, conceivably with interest and post-investments, I could have close to $50k to put down a house.  A lot less than I did the first time.

Is that a decent down payment?  I've never financed with FHA loans; always conventional financing.

My thought was to have the auto loan paid way down, my util on CC @ 1%, my student loan payments started and never late.

So my credit file would have

auto loan paid on time, never late

student loan, paid on time, never late

cc @ 1%

derogs removed (collection items)

Bk > 2.5 years

Frk > - 3 years

[ShanetheMortgageMan]

You'd want to check with the county to see when the foreclosure sale was.  If it actually sold at the sheriff's sale (either back to Wells Fargo or to a new buyer) back on 9/9/09 then that would mark the beginning of the 3-year waiting period.  Getting a copy of the sheriff's sale deed would be the key to documenting that date.  Alternatively you could ask Wells Fargo to send you a letter stating the date when they foreclosed.

I'd say around 98% of buyers who use FHA financing put the minimum down payment down, currently 3.5%, so if you are putting $50k down (and not buying a $1.75MM home) then you'd have considerably more down payment than most FHA buyers.  The only benefit to put more than 3.5% down is a reduction in the rate which the monthly mortgage insurance is calculated.  FHA & terms longer than 15 years, putting down at least 5% will shave .05% per year in annual mortgage insurance premium (.05% of the loan amount).  15-year terms or less, putting down 10-21.99% will reduce the annual mortgage insurance by .25%... and 15-year terms or less, putting down 22% or more will completely eliminate the monthly mortgage insurance.

It sounds like you've maintained your credit since the BK/foreclosure, so as soon as you hit 1 day after anniversary date, assuming your employment & income qualifies, you should be in a good position.

[mauve]

FHA loans' down payment requirements are score-dependent.  Not sure what the limits are - but basically, if you have a mid-score of about 650, you can be approved by most FHA lenders with a 3.5% downpayment.  (640 - but you want some cushion to allow for getting hit with inquiries).  Some lenders will go below that score.  With a much lower score, you will have a much harder time finding a lender and the downpayment requirement will increase to 10%.

[mauve]

FHA loans also carry PMI until you pay down to 78% of appraisal or sales price, whichever is *less*. 

[Hopelives2]

My eyes just watered.

I put down 35% on my home (the one foreclosed upon).  At last appraisal, in August 2008, it was still holding $250k in equity.  In 2009, it still held $225k in equity.  Between the loss of my pride of having taken care of my responsibilities for years, I lost $225k in equity, and with the collapse of Lehman, another $160k in stock.

The fact that I could buy a house, roughly in the $335k range simply ... warms my heart.

From so very broken to possible home ownership again... thank you for making my day!

(now to start with the savings/investments again!)

[ShanetheMortgageMan]

Welcome, good luck saving up!