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Applying for a Mortgage after a foreclosure

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New Member

Applying for a Mortgage after a foreclosure

Hi I wanted to ask how long after a foreclosure can someone apply for a new mortgage, any recommendations as to what banks and or credit Union that are favorable to work with?

all 3 scored are in the high 600's  no collections, 1 late payment 1year since foreclosure 

Message 1 of 6
5 REPLIES
Regular Contributor

Re: Applying for a Mortgage after a foreclosure

Hello,

 

The waiting period for home loans vary depending on loan program. Here is a quick run down

 

1.) Portfolio or NonQM - 1 day after foreclosure. 100% credit score driven. This program has higher rates and fees

2.) VA - 2 years

3.) FHA or USDA RDL - 3 years

4.) Conventional - 5-7 years depending if you file BK7 and added the property.

 

Hope this helps. Feel free to PM me for futher questions.

Mortgage Banker - Since 1988 offering FHA, VA, USDA, Conventional, Jumbo and Portfolio Loan Products. Licensed in AL, AZ, CA, FL, GA, IL, IA, IN, KY, LA, MI, MO, NC, NE, NV, NJ, OH, OK, OR, PA, SC, TN, TX, VA and WI.
Message 2 of 6
Established Contributor

Re: Applying for a Mortgage after a foreclosure

Even 1 late pmt is a huge and especially if you are only 1 year out of BK. Sorry this tells an underwriter you are already having issues.
Message 3 of 6
New Member

Re: Applying for a Mortgage after a foreclosure

Thank you all for replying to my question.
Message 4 of 6
Established Contributor

Re: Applying for a Mortgage after a foreclosure

Hi Roxxy,

 

The time line required depends on the loan program, the situation & they type of loan you had on the home that was foreclosed on.

 

1) Portfolio loans will allow 1 day out of a foreclosure but will require at least 20% down & higher rates and fees.

2) FHA & USDA require 3 years unless your foreclosure was the result of extenuating circumstances & then the wait can be as little as 1 year. The caveat here is what type of mortgage you had on the home that was foreclosed on. If it was FHA, VA or USDA you will be listed in CAIVRS & that can effect how long you have to wait. If you included the mortgage in a BK, your 3 year wait starts from when the bank foreclosed, not the bk discharge date.

3) VA - requires a 2 year wait unless you you qualify under extenuating circumstances & then it's dropped to 1 year. If you included the mortgage in a bankruptcy, you wait is 2 years from the bk discharge date or 1 year with extenuating circumstances.

 

4) Fannie Mae & Freddie Mac are both at 7 years from the foreclosure date unless you have extenuating circumstances & then it drops to 3 yrs & requires 10% down payment. Fannie Mae requires a 4 yr wait when the mortgage is included in a BK & the wait starts from the discharge date of the BK.

National Mortgage Banker.
VA Mortgage Expert.
Message 5 of 6
New Member

Re: Applying for a Mortgage after a foreclosure

Thank you so Much!
Message 6 of 6