@Anonymous wrote:
I have a rental property that I let foreclose back in 2011. I am now looking to purchase a new home. It has not be 7 years but I was given a pre-approval for a conventional loan. It appears that the forecelosure does not show on my credit report. Is this something they might find if I move forward and cause problems? How would they find it?
There are certain disclosures in the application that ask you this question. If you didn't answer truthfully, you are committing mortgage fraud. If your LO answered for you, then he hasn't done his due diligence and has committed mortgage fraud.
We have this nifty little software on our processing side that we call a Fraud detection report. When we put everyone's name in the transaction, the software checks history more than 7 years and if the names ever show up in OFAC as well. The software also checks public records and where has one person lived. I've seen it go back 20 years and I have information on where, you the client, has lived in the past 20 years and what kind of judgements, real estate foreclosures, and or bankruptcies the client has been through. This will automically stop the loan process and you'll be getting a call from the LO or processor asking if you had a foreclosure. When you confirm it, your loan will be denied, UNLESS this is a portolio product.
Licensed in IL
