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CONFIRMED!! FHA loan with defaulted student loan in rehab!

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New Visitor

Re: CONFIRMED!! FHA loan with defaulted student loan in rehab!

Thank you so much!! One last question, do you think it’s better to do the rehabilitation or the consolidation?
Message 21 of 29
New Member

Re: CONFIRMED!! FHA loan with defaulted student loan in rehab!

In my opinion the loan rehab is better. You can set your own payment depending on your income and they'll remove the default from your credit. Make sure you diapute the default as soon as you complete the program. Call Dept of Ed a week after and make sure they process your CAIVRS clearance. Then you can apply for your fha loan after they give you the caivrs clearance number. Write that number down. One other thing to remember is when you have finished your 9 months and your loan is transferred, your payment will only remain the same for 3 months. Then it will go up but you'll have to work out payment options with your new loan servicer.
Message 22 of 29
New Visitor

Re: CONFIRMED!! FHA loan with defaulted student loan in rehab!

Awesome!! Thank you again!
Message 23 of 29
New Visitor

Re: CONFIRMED!! FHA loan with defaulted student loan in rehab!

Has anyone seen this? It talks about getting a conventional loan instead, bypassing the CAIVRS. What I am wondering is if anyone has had their money in escrow taken out by the government for defaulted Student Loans. Thanks!

https://www.realtor.com/advice/finance/caivrs-database-mortgage/
Message 24 of 29
Valued Member

Re: CONFIRMED!! FHA loan with defaulted student loan in rehab!

Student loans are easy to fix mainly because for the most part you cannot ever get rid of it unless you pay it, get a qualified forgiveness plan or die. defaulting on a Student Loan is not the end of the world even though it may feel like it at the time. Simply rehab the loan which requires you to make several months of payments on time or consolidate your loans which will bring you out of default. If your going to do a FHA, VA or USDA backed loan consolidation will be the fastest route.


















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Message 25 of 29
Regular Contributor

Re: CONFIRMED!! FHA loan with defaulted student loan in rehab!

HeidiHappyHeart asks a good question “Has anyone had their home threatened or taken by government for defaulted Student Loans.”  Does government ever try to sue so they can try and take future assets to help settle repayment. 

 

In my specific case, its my spouse that has been in default for over 30 years (before marriage.)  She is an at home mother with no employment. DP for conventional is way to expensive. Can I keep her off FHA mortgage loan? Will FHA insist on running her entire credit or just have her sign some papers to acknowledge my purchase?  Thx!

Ex 673 | Eq 665 | 665 TU (10-9-18)
Filed BK7: 11/2014 (start score TU 749) Discharge 4/2015 578 TU

$11,500 Cap1 Spark | $7,000 Cap1 QS | $5,500 Barclay | $500 Secured card w/ Western Fed CU | $3,000 Un-Secured Fry’s First Electronic Bank | Macy's 3,500 | Disc 11,500 | $100 Un-Secured Share Loan | all Util under 3%
Message 26 of 29
Community Leader
Valued Contributor

Re: CONFIRMED!! FHA loan with defaulted student loan in rehab!

Since I don't have an answer, my internets skills tell me that a single spouse can take out the FHA loan but it's still going to require a DTI ratio from both of you, but of your scores and.... unfortunately will take into account things like the defaulted student loan which will probably disqualify you.
https://www.trulia.com/voices/Home_Buying/Why_does_both_the_husband_and_wife_have_to_be_on_a-265847

Your question might be better asked in a new post in the mortgage section.

The quickest solution is consolidation (not private) to send it back to the servicer in a few months. The better option is rehabbing which is like 9 months if you can wait. There is an article about rehabbing vs consolidation I gave your DW in the other post.



Message 27 of 29
New Visitor

Re: CONFIRMED!! FHA loan with defaulted student loan in rehab!

Thanks for the info. Did you see a signifanct change in your credit score once you were out of rehab?

Message 28 of 29
Community Leader
Valued Contributor

Re: CONFIRMED!! FHA loan with defaulted student loan in rehab!

My loans haven't defaulted; it was someone else I know. However a every post over read on here are borrowers getting significant gains by getting out of default. As long as it's it's your only collection account and you keep up everything else it's not uncommon to see a more than 50-100 point gain in a year. Also depends on what lates you get removed.



Message 29 of 29
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