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Just to clarify, I never said that you HAD to have perfectly clean credit post BK, or that you HAD to have 24 months clean credit.
What I said was that given low FICO scores, low down payment (trying to do zero out of pocket DP), BK, recent lates, and low reserves (which the OP updates to show there were some reserves) there was slim chance of an approval. The OP has or is in the process of paying all card down which will bump score and has 7200 in cash reserves. That still makes it a tough sell but possible.
As far as the 24 months, my point was, given the initial "spot view" of the file we were given, and without a jump in FICO and/or reserves, most UW would want to see a very established clean credit file. with lates post BK, the magical 12 months may not be enough. Not to say yo would need exactly 24 months, but just a strong track record of in time payments that they can track.
Mickie,
Do you think that because the lates were derived from my husbands unexpected 2mo job attached layoff and my 3yr old daughter's kidney surgery will make a difference if I do a letter of explanation?
Rocky,
I will wait for the PM. I dont want to pay the collections until the bank tells me that it is necessary for me to do so in order to close the home loan. So I think I have some time.
Also, I just heard from the Real Estate Agent that is listing our current residence for sale post foreclosure. He is saying that he thinks they are going to list at about 165k and that FreddieMac is also going to offer 3.5% closing assistance. He also told me that with the 165k on a foreclosure, he thinks that an offer of 130k would be accepted by Freddie. So now I am torn, stay here and buy this one or move on and buy something else????
AU (automated underwriting) is a computer based program that pretty much all FHA loans go through. It will either say approved, or refered (there may be a straight denial answer to but I think most LO's weed out the people before this...Again not sure on that).
If it says refered, you have to have the individual UW for the lender do all the underwriting on the file.
If you get an approval, the UW at your lender just needs to verify all the information and help with the process (apparisal, etc).
Certain situations (past BK or Foreclosure with recent lates, High DTI, etc) usually HAVE to be approved through the automated underwriting and can not be manuallly approved. AU will approve these situations as long as you have some compensating factors such as good down payment/reserves, high FICO, and low DTI.
aisanart's message was split off to create a new thread.
Mickie,
Someone had told me today that you can ask a lender to do a rapid rescore with the CRA's now that I have paid off my CC's. They said to post on the mortgage forum and ask how to do it and what benefit it has. Do you know anything about this?