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Call Me (323) 717 1144 or lduran@leeduranthefinanceman.com
Foreclosure and buy again???
We sometimes have clients we run into that have either had a bankruptcy, foreclosure or short sale in the past and the following are our guidelines for qualification purposes on new home loans for these types of clients:
FHA loans:
Foreclosure- 3 year waiting period from the time the foreclosure was recorded
Short sale- If the client prior to the short sale had no delinquent payments on the mortgage for the most recent 12 month period, there is NO waiting period for a new FHA loan. If the client DID have late payments 12 months prior to the short sale the waiting period for a new FHA loan is 3 years.
Chapter 7 bankruptcy- 2 year waiting period from the date of the discharge.
Chapter 13 bankruptcy- There is usually a 5 year repayment period with a fixed payment for these types of bankruptcies and as long as they have paid on time for the past 12 months on the bankruptcy payment and we count the bankruptcy payment towards our DTI ratio they can qualify for an FHA loan after 12 months of on time BK payments. If the client has missed payments on the BK agreement then we have to wait until that client can prove 12 months of on time BK payments.
Conventional loans:
Foreclosure- 7 years from the date of the foreclosure
Chapter 7 bankruptcy- 48 months from the discharge date
Chapter 13 bankruptcy- There is usually a 5 year repayment period with a fixed payment for these types of bankruptcies and as long as they have paid on time for the past 24 months on the bankruptcy payment and we count the bankruptcy payment towards our DTI ratio they can qualify for a Conventional loan after 24 months of on time BK payments. If the client has missed payments on the BK agreement then we have to wait until that client can prove 24 months of on time BK payments.
Short sale Fannie Mae- 2 year waiting period and can go up to 80% LTV, 4 year waiting period for LTV of 80-90% and 7 year waiting period for LTV 90-100%
Short sale Freddie Mac- 4 year waiting period
Short sale Fannie or Freddie WITH any mortgage lates 12 months prior to short sale the client will have to wait 7 years to obtain a new conventional loan, so it is basically treated like a foreclosure.
Let me know if you have any questions.