Mortgage details and things I'm seeing regarding credit:
Forgiveness of debt in a modification is treated the same as short sale.
Wait is four years for conventional loans and three for FHA
Mortgage Credit
reports should be read and interpreted by an expert. The lady in the credit union that takes your papers to be processed for a loan can misinterpret or miss read. It is vital to view a mortgage credit report on day one with regards to derogatory credit events
and the proper calculation for seasoning.
· Fannie Mae only – The foreclosure seasoning can be reduced from 7 years
to 4 years if the property is surrendered in the Chapter 7
bankruptcy. Make sure the property is listed on the Chapter 7 form Debtor’s
Statement of Intention and marked as surrendered. This reduced
seasoning does not apply for foreclosures that
·
All loan types – A HELOC settled for less than full balance can occur even
if there is no short sale or foreclosure. Lien Holders can be approached
with a request to reduce the balance, or the Lien Holder may initiate the
settlement. Determine the property address associated with the HELOC or 2nd
mortgage. Even if the borrower still owns the property, sufficient seasoning
will be required as the lender has taken a aloss. This would be
considered a pre-foreclosure situation requiring 4 year seasoing for Fannie or
Freddie, 3 year seasoning for FHA or USDA, and 2 year seasoning for VA, from
the date of the settlement/foregiveness.
