Mortgage question - post foreclosure in 2015

[radfam]

Hi all!  We are actively rebuilding to prepare for a mortgage.  My spouse received an FHA home loan in 2008 that foreclosed in 2015.  After just speaking with a potential lender last year, it was discovered that both DH and I appeared on CAIVRS until Oct 2018.  I was young when we purchased that home, and not knowledgeable whatsoever about credit at that time.  My credit was really bad, so DH was approved on his own for that home and I was on the deed only.  So it makes sense why I appeared on CAIVRS after foreclosure.

My question is, now that we are rebuilding, will FHA be our only option until we pass the 7 year mark after foreclosure?  I don't know how it works for conventional since I was not on the FHA mortgage, but I was on the deed.  The foreclosure does appear on his credit report but not mine.  Will the 7 year post-foreclosure timeline prohibit me from getting a conventional loan by myself?

[VALoanMaster]

Hi Radfam,

Since you were not on the note, you 100% should not be in CAIVRS as result of the FHA foreclosure regardless of whether or not you were on the deed.

If you are in the CAIVRS system for that mortgage, we should be able to have your SSN suppressed in the system because you're in the system by mistake.

The other option would be to wait a little longer. You & your husband will drop out of CAIVRS 36 months after FHA paid the claim which should have occurred within 6 months of the foreclosure.

As far as getting approved for a conventional loan goes, it depends.

I have had underwriters deny loans in scenarios just like this. This was several years ago & the underwriter's "logic" was that even though you were not on the note, you were on the deed & you lived in the home so you had a "responsibility" to pay the mortgage. 

I think FHA is going to be your best bet.

[homeloanexpert]

I concur with the VALoanMaster

[radfam]

Thanks to you both!  I have one additional question in the same context.  I ask about conventional as an option because we are in a community property state.  My DTI is fine, even calculating in DH's debts with only my salary.  However, he has had two recent lates (11/18 and 12/18) on 17 federal student loan TLs that came out of in school deferrment with no notification from the lender prior to that.  We have resolved that and no additional lates will be added for 01/19. 

I know that I cannot have any lates in the last year for FHA.  However, what does this mean under FHA for a nonpurchasing spouse in a community property state?  Obviously, we are rebuilding.  We aren't running out to purchase a new home today.  It has taken significant effort to come as far as we have already and we don't intent to slow down, as we eventually want to purchase again.  I am mostly curious right now on what late notations on the report of a nonpurchasing spouse mean for a purchasing spouse in a community property state under FHA.

[VALoanMaster]

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@radfam wrote:

Thanks to you both!  I have one additional question in the same context.  I ask about conventional as an option because we are in a community property state.  My DTI is fine, even calculating in DH's debts with only my salary.  However, he has had two recent lates (11/18 and 12/18) on 17 federal student loan TLs that came out of in school deferrment with no notification from the lender prior to that.  We have resolved that and no additional lates will be added for 01/19. 

I know that I cannot have any lates in the last year for FHA.  However, what does this mean under FHA for a nonpurchasing spouse in a community property state?  Obviously, we are rebuilding.  We aren't running out to purchase a new home today.  It has taken significant effort to come as far as we have already and we don't intent to slow down, as we eventually want to purchase again.  I am mostly curious right now on what late notations on the report of a nonpurchasing spouse mean for a purchasing spouse in a community property state under FHA.

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Hi Radfam,

The payment history of the non-purchasing spouse (NPS) does not come into play. 

[radfam]

Thank you for your quick response, VALoanMaster

[VALoanMaster]

You're welcome.

[radfam]

**Edit, deleted info to make a separate post.