Mortgage after bankruptcy and foreclosure

Anonymous · ‎04-25-2015

I'm having a hard time finding definitive answers.
We lost our home for the fifth time to a flood. That time we just couldn't financially recover. We filed for bankruptcy. The bank then foreclosed seven months after the bk was discharged.
Further, we originally filed in 2011, after the flood, it wasn't discharged until Early 2014. Our attorney had a catastrophic health event and it just got held up through no fault of our own. In the meantime, we have rebuilt our credit with no lates on renting since we left in 2011. Credit is just shy of 700 for both of us and monthly net income of $6,000.
I think we would qualify for the extenuating circumstances fha loan. Here's the question, is the program seasoning from the first event (bk) or the second?

Anonymous · ‎04-25-2015

It's typically 3 years for a foreclosure, 2 years for a BK. I believe the BK would take precedence if the house was included. If not, they're two independent events, and the clock would start on the day the foreclosure was completed.

Anonymous · ‎04-25-2015

It was definitely included.
I think we could do the extenuating circumstances part of the fha program to qualify in the 12 month period.
I have our tax returns to show an agi of 50% less for 2011.
The whole problem was that I found a lender that said we had to wait from the foreclosure. I questioned him because the bk included the house and he said it would begin seasoning from the foreclosure.
I've not been able to find definitive info on it. Hence, I'm here.
Thank you for your help.

Anonymous · ‎04-25-2015

@Anonymous wrote:
It was definitely included.
I think we could do the extenuating circumstances part of the fha program to qualify in the 12 month period.
I have our tax returns to show an agi of 50% less for 2011.
The whole problem was that I found a lender that said we had to wait from the foreclosure. I questioned him because the bk included the house and he said it would begin seasoning from the foreclosure.
I've not been able to find definitive info on it. Hence, I'm here.
Thank you for your help.

Probably. I'd think a flood would count as an "extenuating circumstance".

https://www.fanniemae.com/content/guide/selling/b3/5.3/07.html

If a mortgage debt was discharged through a bankruptcy, the bankruptcy waiting periods may be applied if the lender obtains the appropriate documentation to verify that the mortgage obligation was discharged in the bankruptcy. Otherwise, the greater of the applicable bankruptcy or foreclosure waiting periods must be applied.

Anonymous · ‎04-26-2015

Ok. One last question.
That quote above says Fannie Mae and I did find that. I'm wondering if FHA plays by the same rules?

gdale6 · ‎04-26-2015

@Anonymous wrote:
Ok. One last question.
That quote above says Fannie Mae and I did find that. I'm wondering if FHA plays by the same rules?

Its my understanding that FHA is 2 yrs post filing of BK. The mortgage TL should be showing 0 balance IIB since it was discharged and no reference to a FC since it occured post BK filing.

Anonymous · ‎04-26-2015

Yes. It normally is two years unless you apply through Back to Work/Extenuating Circumstances.
We only filed bk because of all the flooding. The flood in 2011 was our fifth. Three of the five were major. One of those three took three walls of foundation. It's been a nightmare.

TRC_WA · ‎04-27-2015

@Anonymous wrote:
Yes. It normally is two years unless you apply through Back to Work/Extenuating Circumstances.
We only filed bk because of all the flooding. The flood in 2011 was our fifth. Three of the five were major. One of those three took three walls of foundation. It's been a nightmare.

Wow... and you didn't move after the first one?

Your story reminds me of the people here in WA who build houses on the sides of a cliff... prime landslide real estate.

Good luck to you.

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ezdriver · ‎04-27-2015

@Anonymous wrote:
It was definitely included.
I think we could do the extenuating circumstances part of the fha program to qualify in the 12 month period.
I have our tax returns to show an agi of 50% less for 2011.
The whole problem was that I found a lender that said we had to wait from the foreclosure. I questioned him because the bk included the house and he said it would begin seasoning from the foreclosure.
I've not been able to find definitive info on it. Hence, I'm here.
Thank you for your help.

Having a home mortgage discharged in a bankruptcy is a different issue than having the ownership of the deed transfer from your name to another [bank ro buyer]. You remain the owner of that property until your name is no longer on the deed/title. Yes, FHA requires a three-year wait from the foreclosure if it occured after the bankruptcy discharge. I financed a new construction home last year using the FHA's Back To Work provision so I know a lot about how that works.

Anonymous · ‎04-27-2015

The property never flooded previously. We were supposed to be safe. Once it did flood the following floods happened pretty soon after the first and there was no way to sell. We tried. No dice.
Think of it this way, would you buy a house that flooded 3 times in 7 years? Nope. I wouldn't either.
A weir was built right after we bought that raised the river level. That was the issue.
It takes time to wrap your head around walking away. Especially when you have children and pets and a community to think of. It comes down to simply realizing you can't afford to stay anymore.