Silver Lining: Getting a Home Loan after Foreclosure

Paddleboarder heading out to find the silver lining in the fog this morning.

How long must I wait to get a standard loan after bankruptcy, foreclosure or short sale?
The answers are better than you think, BUT layered with the fact that you MUST rebuild and re-establish credit to be eligible for decent pricing.  FICO score determines market rate (more in another post).

SAVE all your Bankruptcy, Foreclosure, Short Sale paperwork for 8 years. BK docket summary and discharge paperwork is valuable and necessary.

FANNIE MAE RULES:

Chapter 13 BK :                       4 years from dismissal, 2 from discharge

Chapter 7 or 11 BK                 4 years

More than one BK filing        5 years if more than one in 7 years

Foreclosure                             7 years unless you can prove special circumstances(more coming) then 3 years          * see me for what constitutes special

Deed in Lieu of Foreclosure  2 years  20% down required
Or Short Sale                           4 years   10% down   7 years 5% down

 ____

FHA RULES

Chapter 7 BK                          2 years from Discharge
Chapter 13 BK                        1 year of payout and payment performance and court approval
Foreclosure                            3 years from final
Short Sale                               no time restriction IF all mortgage payments and installments were on time past 12 months  prior to application date
Or 3 years if in default at date of short sale

What hurts your credit the most?

Prolonging the number of late payments combined with foreclosure.

Caroline Gerardo copyright 2012 all rights reserved

Buying a Home To Do List

You are thinking of buying a home and applying for a loan.

Things You Must be Aware of During the Process:

1.       Stay on your same job until the deal is closed

2.       Keep the same bank accounts

3.       Keep paying your bills

4.       Do not transfer money in accounts or deposit more than $300 without keeping every shred of where it came from

5.       Do not shop for a car, furniture or give anyone your social security number to run your credit

6.       Do not give your landlord notice

7.       Do not apply for any other credit

8.       Do not pay collections- pay it at closing if necessary

9.       Do not use overdraft or have insufficient charges on bank statements

10.   Use your own money for anything related to purchase of the home, to avoid appearing as a gift

Homework List For a Loan

Homework List for your Loan Application

Documents You Will Need to Start Your Loan Application

We understand this is more paperwork than you ever were asked to

provide before. This is an initial list of items, and may lead to requests

for more paperwork.

IRS Form 4506-T — signed and dated

Pay stubs covering the last 30 days with year-to-date information included (all jobs and applicants)

W-2s for the past two years

Federal tax returns (1040s) for the past two years

Asset / Bank statements — Past two months' statements all accounts and all pages no online printouts

We will discuss explanations for late payments, collections, judgments documentation for any large deposits on asset statements

Other:

Driver's License and Social Security card — legible copies

Hazard (Homeowner's) insurance information including agent's name and phone number

Purchase contract — signed by all parties (fully executed)

 SELF EMPLOYED BORROWERS- a few more items

Federal tax returns (personal as well as business returns) — complete copies for the last 3 years

• Profit and loss statement — year-to-date
• List of all business debts

Content and information provided as a as to accuracy or completeness of information and assumes no liability for use of this information.

C G Barbeau
(949) 637-8190
NMLS 324982