New Rules: Obtaining Mortgage After Foreclosure, Bankruptcy, Shortsale! A bankruptcy meant that you were not able to obtain a mortgage for 3-5 years. No longer. Now the FHA is extending FHA-insured financing to borrowers who have experienced a foreclosure, deed-in-lieu, short sale, or bankruptcy as recently as one year ago. The waiting periods were previously three years after a foreclosure or short sale and two years after a Chapter 7 bankruptcy. As a result of the recent recession many borrowers who experienced unemployment or other severe reductions in income, were unable to make their monthly mortgage payments, and ultimately lost their homes to a pre-foreclosure sale, deed-in-lieu, or foreclosure. Some borrowers were forced to file for bankruptcy to discharge or restructure their debts. Because of these recent recession-related periods of financial difficulty, borrowers’ credit has been negatively affected. FHA recognizes the hardships faced by these borrowers, and realizes that their credit histories may not fully reflect their true ability or propensity to repay a mortgage. To that end, FHA is allowing for the consideration of borrowers who have experienced an Economic Event and can document that: ■certain credit impairments were the result of a Loss of Employment or a significant loss of Household Income beyond the borrower’s control; ■the borrower has demonstrated full recovery from the event; and, ■the borrower has completed housing counseling. This is great news at a great time! Rates are still low and home values are just starting to rise. If owning a home is important to you now is a great time to see if you are qualified. Contact the mortgage broker or bank of your choice or ask us for a recommendations.
Posted on: Wed, 21 Aug 2013 21:52:40 +0000
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