Hello Forum,
First time poster, LONG TIME reader/lurker on this forum.
I feel compelled to put my story out there because soooo many of you have posted yours and it has helped us tremendously, and I have to at least return the favor.
Chap. 7 BK in 2010, discharged in Jan. 2011. Wife had foreclosure back in 2009. We spent the last 2 years gardening and went from low 600's fico to 669 by the time we applied for our FHA loan for new property build in Dec 2012. Application formally submitted Feb. 2013 because of FHA 2yr. requirement for BK. Living with inlaws saving downpayment money and hastening gardening process.
Unfortunately, the pain didn't stop there; upon applying for our loan it was discovered that my wife and I had county tax liens. Mind you, these liens were supposed to be discharged in our BK. The liens were from tax re-assessed on 2 properties we previously owned after they were foreclosed on back in 2009. In CA, re-assessed taxes are not paid by the new buyer/owner of the foreclosed home, rather they are personally attached to the former borrower. However, the liens do not show up on credit report. Rather, they showed up in the County records when we applied for the FHA loan. The liens either had to be released or paid to proceed with pre-approval. We scraped to pay the thousands of dollars owed to get the liens released, and this was after we had already paid our 3% earnest money for new build. Lender pointed them out in the beginning of app process, but I tried to get our atty to fix these via our BK, but BK "motion to reopen case" to fix it would have taken months, which would have cost us our earnest money and loss of the home. Thus, we sucked it up and paid it.
Next, showed up in CAIVRS under the SBA for a loan I took out to start a business during the recession, which essentially failed. If CAIVRS not cleared, NO FHA loan approval. Plus, we certainly couldn't switch to conventional because of our inability to put down the 15-20 percent down on a $315K home. Sucked up and paid CAIVRS (ouch)!
Next, wife's score drops because of a dog license ticket that showed up on her credit report. The darn ticket was already paid and issuing City didn't keep proper records. Had to drop wife off the loan application and proceed on my own. (Ticket was eventually fixed by City but credit report update still hasn't reflected that).
On to design center (new build). Lady at design center not too knowledgeable of our situation and we pretty much went overboard with the home picking out amenities, unaware of the implications it would have on APPRAISAL. After profuse apologies by design center lady, we were LUCKY the lender was well versed on design build options and the impact it has on appraisal and thus at the last minute there was a mass reversal of several design options picked. Had the design options been installed, the appraisal would have come in below the loan value, which would have caused us to lose the home too. Appraisal came in at $75 dollars off approved loan amount! Talk about the skin of the chinny chin chin!
IRS, tacked on a huge bill from the formally failed business of about 8K. I setup a payment plan with them back in Aug. of last year. Lender was a little concerned because they want you to show at least a year or more of on time payments with IRS when in a payment plan. This is similar to what a lot have mentioned on these forums. Favorable was that there was a payment plan established and not a lien, in conjunction with the signed payment agreement arrangements with IRS.
All this madness, stress and ups/downs with inlaws, financials, etc. culminates to closing tomorrow on 3.25% 30yr. rate.
I can't thank all of you enough for the wealth of info and guidance. I'll post when "keys are in hand"!
