Here's what I have seen many of the borrowers on the forum experience and I wanted to respond with what my underwriting department told me directly in regards to this. Many questions that borrowers have asked are:
1. How long before I qualify for an FHA loan if I included my home in the bankruptcy?
2. Are the seasoning requirements related to the bankruptcy or foreclosure?
3. When does the foreclosure seasoning begin?
Answer:
Foreclosure seasoning is from the Trustees Sale date and not anything that is listed on the credit report. The Trustees Sale would be of public record and a Title company could pull it up. However, FHA has some other funky things, like if the home was surrendered in the Bankruptcy then the seasoning for a Foreclosure would begin on the date the BK was discharged, BUT, if FHA had to pay a claim on the previous FHA loan, then the borrower will have to wait 3 years from the date the claim was paid by FHA and that date would have to be accessed in the FHA mortgage connection.
A bit more detective work is in order for these types of transactions, if you have a loan officer that wrote you up a pre-approval for a new home purchase you may want to make sure these questions are answered. If you make a good faith deposit and the loan doesn't fund or meet the 17 day loan contingency in many states you may end up surrendering the deposit. In some cases these deposits are in excess of 10,000.00 - you don't want to risk that. Make sure you're working with a qualified professional that has been in the industry for some time.
If you have any questions please don't hesitate to ask.
1. How long before I qualify for an FHA loan if I included my home in the bankruptcy?
2. Are the seasoning requirements related to the bankruptcy or foreclosure?
3. When does the foreclosure seasoning begin?
Answer:
Foreclosure seasoning is from the Trustees Sale date and not anything that is listed on the credit report. The Trustees Sale would be of public record and a Title company could pull it up. However, FHA has some other funky things, like if the home was surrendered in the Bankruptcy then the seasoning for a Foreclosure would begin on the date the BK was discharged, BUT, if FHA had to pay a claim on the previous FHA loan, then the borrower will have to wait 3 years from the date the claim was paid by FHA and that date would have to be accessed in the FHA mortgage connection.
A bit more detective work is in order for these types of transactions, if you have a loan officer that wrote you up a pre-approval for a new home purchase you may want to make sure these questions are answered. If you make a good faith deposit and the loan doesn't fund or meet the 17 day loan contingency in many states you may end up surrendering the deposit. In some cases these deposits are in excess of 10,000.00 - you don't want to risk that. Make sure you're working with a qualified professional that has been in the industry for some time.
If you have any questions please don't hesitate to ask.
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