Question about timing for an FHA after Foreclosure

Anonymous · ‎09-29-2017

Greetings all!

I had a foreclosure which was finalized in December of 2014. With the three years of seasoning coming up and us looking to purchase a new house, I'm trying to get my ducks in a line to make the process go more quickly.

We're going to talk to our credit union about the loan - as they offer FHA loans and we'd rather keep all of our finances under one roof and I'm getting together the following now:

Address to your place of residence (past two years)
Copy of the trust deed transfer or mortgage foreclosure document to prove that it has been 3 years after your foreclosure or short sale. (county recorders office has copies of this) This is VITAL to getting your loan approved and making sure you won’t have any issues down the line.
LOE (Letter of explanation) regarding the foreclosure or short sale. Email us for a sample letter.
Cannot enter into a purchase contract until after the 3 year anniversary or HUD will not insure the loan. This is a common mistake and will most definitely delay your closing!
Re-established credit. At least one open credit line with a low balance preferred.
Social Security numbers (SS Cards)
Names and location of your employers (past two years)
Gross monthly salary at your current job(s)
Pertinent information for all checking and savings accounts
Pertinent information for all open loans
Complete information for other real estate you own
Current check stubs and your W-2 forms (past two years)
Personal tax returns (past two years), current income statement and business balance sheet for self-employed individuals

Our credit scores are above 710, and should improve a bit more before December. We understand that we couldn't actually put an offer in on a house for an FHA loan until the foreclosure in completely seasoned.

So...a few questions:

When should we start talking to our bank about getting pre-approved for a mortgage?
Will the seasoning of the foreclosuring affect the timeline of getting the pre-approval?
What other paperwork should I have on-hand to present to the loan officer to make the process smoother?
When should we contact our Real Estate Agent? We'd like to start looking in December and move in February or early March.
What other possible red flags can we look to head off? I've already spoken to HUD, and there doesn't appear to be a CAIVRS report on the foreclosure (I kept a physical and electronic copy of that communication!)

Any help, pointers or advice from the experts I've seen online here would be a tremendous help. We're trying to have everything ready in advance so that the process is smooth, the lender has everything they need and we can have a relatively smooth closing.

Many thanks!

Anonymous · ‎09-29-2017

1. If your previous loan was government backed you will want to have your lender check CAIVRS inmediately or you could be in for a terrible surprise.

Anonymous · ‎09-29-2017

I see you talked to HUD but still have your lender pull.

Anonymous · ‎09-29-2017

Yup. Already reached out to HUD to ensure that there wasn't a report, and the response I got was:

"Per the case number XXXXXXXXXX record, the case number does not have any Claim being paid by FHA therefore borrower should not be reported in CAVIRS database."

Anonymous · ‎09-29-2017

Surprised they said 1 line of credit as 3 seem to be most preferred and required by some lenders.

Anonymous · ‎09-29-2017

Was it a government backed loan previously. No claim paid means they may not have filed a claim yet which means your start time hasn’t began. If it was a previous government backed loan.

Anonymous · ‎09-29-2017

The credit lines aren't a problem as we have a few credit cards and a car loan.

Anonymous · ‎09-29-2017

@Anonymous wrote:
Was it a government backed loan previously. No claim paid means they may not have filed a claim yet which means your start time hasn’t began. If it was a previous government backed loan.

I'm not entirely sure if it was a government backed loan - which is why I'd reached out to HUD for clarification. They didn't have any records of me in the system, but I can't say for sure. This kinda boils down to one of my questions. When can we start talking to lenders about an FHA loan - given that the 3 year seasoning doesn't fall off until December? I realize we couldn't put any offers in until after the 3 years, but can a bank do a pre-approval before the end of the 3 years so I can find out if there are any hidden land mines which are going to hold up buying a house?

StartingOver10 · ‎09-29-2017

@Anonymous wrote:
Greetings all!

I had a foreclosure ....
So...a few questions:

When should we start talking to our bank about getting pre-approved for a mortgage?
Will the seasoning of the foreclosuring affect the timeline of getting the pre-approval?
What other paperwork should I have on-hand to present to the loan officer to make the process smoother?
When should we contact our Real Estate Agent? We'd like to start looking in December and move in February or early March.
What other possible red flags can we look to head off? I've already spoken to HUD, and there doesn't appear to be a CAIVRS report on the foreclosure (I kept a physical and electronic copy of that communication!)
Any help, pointers or advice from the experts I've seen online here would be a tremendous help. We're trying to have everything ready in advance so that the process is smooth, the lender has everything they need and we can have a relatively smooth closing.

Many thanks!

Get pre-approved after your 3 yr anniversary date - the anniversary is a hard line and you don't want to accidently make an offer even a day early
Yes, I would say the f/c affects the timeline, otherwise you could go sooner than the 3 yr date
Have a copy of the deed for the foreclosed property showing the date it went back to the bank. There have been times when the date on the deed was (for example) Dec 20th and the recording date was Jan 5th - so some lenders go by the recording date IME. Pull your copy so you can supply it to the u/w and so you know exactly when 3 years is up.
If 2017 income is higher, file those taxes asap and then get your mortgage

The most common discrepancy I see (I'm a Realtor) is the date on the deed for the foreclosed property.

Anonymous · ‎09-29-2017

You really need to know if your loan was FHA/VA/USDA or conventional.
I don’t believe you can even start the process until the seasoning time has passed.
I hate to beat the subject but we nearly lost our home because Wells Fargo delayed filing with HUD by 1 1/2 years (of course we knew nothing about claims and CAIVRS at that time). We got it surpressed because of that error but it was AWFUL. My wife cried and cried. We were discharged 8/2012 and handed the house back right away.