A Handy List of Credit Problems with Timelines to Repurchase
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FORECLOSURE
home was given back to bank, no owner participation
SHORT SALE
home sold but sales price didn't cover amount owed
DEED IN LIEU OF FORECLOSURE
home returned to lender in exchange for canceling loan
BANKRUPTCY CHAPTER 7
debts are discharged through BK, client does not pay any debts owing
BANKRUPTCY CHAPTER 13
debts are paid back on monthly scheduled payment plan by client
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Conventional Loans |
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FORECLOSURE
* 7 years from date foreclosure completed and transferred back to bank if they had no extenuation circumstances
*3
Years from date of foreclosure completed and transferred back to bank
with acceptable extenuating circumstances and 10% down payment. Primary
home purchase and rate/term refinance only.
Non-owner and second homes not allowed
SHORT SALE
DEED IN LIEU OF FORECLOSURE
* 7 years from date of sale closed and transferred to new owner or transferred back to bank for less than 10% down payment
* 4 years from date sale closed and transferred to new owner or transferred back to bank with 10% down payment
* 2 years from date sale closed and transferred to new owner or transferred back to bank with 20% down payment.
*2
years from date of sale closed and transferred to new owner or
transferred back to bank possible with acceptable extenuating
circumstance and 10% down payment
BANKRUPTCY CHAPTER 7
* 4 years from discharge date
* 2 years from discharge date possible with
acceptable extenuation circumstance
BANKRUPTCY CHAPTER 13
* 2 years from discharge date
* 4 years from dismissal date |
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FHA Loans | |
FORECLOSURE
DEED IN LIEU OF FORECLOSURE
* 3 years from date of foreclosure completed and transferred back to bank
*
Less than 2 years, but not less than 12 months from date of foreclosure
completed and transferred back to bank may be acceptable if the result
of acceptable extenuating circumstances
SHORT SALE |
BANKRUPTCY CHAPTER 7
* 2 years from date of discharge with re-established credit paid as agreed or no new credit obligations incurred
*
Less than 2 years, but not less than 12 months from date of discharge
may be acceptable if the bankruptcy was caused by acceptable extenuating
circumstances and borrower has since exhibited a documented ability to
manage financial affairs in a responsible manner
BANKRUPTCY CHAPTER 13
*
1 year payout period under bankruptcy has elapsed and the borrower's
payment performance has been satisfactory and all required payments made
on time VA Loans | |
FORECLOSURE
DEED IN LIEU OF FORECLOSURE
* 2 years from date foreclosure completed and transferred back to bank
*
12-23 months from date foreclosure completed and transferred back to
bank if credit re-established and paid as agreed and was caused by
acceptable extenuating circumstances
SHORT SALE
* 2 years from date sale closed and transferred to new owner
*
No waiting period if borrower had no late payments on any mortgages and
consumer debts within the 12 months period preceding the short sale AND
they are not taking advantage of declining market conditions
BANKRUPTCY CHAPTER 7
* 2 years from date of discharge
*
12-23 months from date of discharge if credit re-established and paid
as agreed and was caused by acceptable extenuating circumstances
BANKRUPTCY CHAPTER 13
*
1 year payout period under bankruptcy has elapsed and the borrower's
payment performance has been satisfactory and all required payments made
on time
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USDA (Rural Development) Loans |
FORECLOSURE
DEED IN LIEU OF FORECLOSURE
SHORT SALE
* 3 years from the date the foreclosure was completed and transferred back to the bank
*
Less than 3 years from date the foreclosure was completed and
transferred back to the bank may be considered with acceptable
extenuating circumstances
BANKRUPTCY CHAPTER 7
* 3 years from date of discharge
* Less than 3 years from date of the discharge may be considered with acceptable extenuating circumstances
BANKRUPTCY CHAPTER 13
* 1 year from the date repayment was completed and bankruptcy discharged
* Less than 1 year from the date of discharge may be considered with acceptable extenuating circumstances |
EXAMPLES OF ACCEPTABLE EXTENUATING CIRCUMSTANCES
(CIRCUMSTANCES MUST BE VERIFIED AND DOCUMENTED) | |
CONVENTIONAL:
nonrecurring
events that are beyond the borrowers control that result in a sudden,
significant, and prolonged reduction in income or a catastrophic
increase in financial obligations
FHA: serious
illness or death or a wage earner. Divorce and the inability to sell a
property due to a job transfer or relocation to another areas DOES NOT
quality as an acceptable extenuating circumstance
VA:
unemployment, prolonged strikes, medical
bills not covered by insurance, etc, divorce is not viewed as a beyond
the control of the borrower and or spouse
USDA: loss
of job, delay or reduction in government benefits or other loss in
income, increased expenses due to illness, death, etc. Circumstances
surrounding the adverse information must have been temporary in nature,
AND beyond the applicant's control, AND have been removed so their
reoccurrence is unlikely or the adverse action or delinquency was the
result of a refusal to make full payment because of a defective goods or
service or as a result of some other justifiable dispute relating to
the goods or services purchased or contracted for. _________________________________________________________
 
The Highland Group
Chris & Karen Highland * 301-831-9947
Turning Point Real Estate – 301-831-8232
email us: isell4u2@msn.com
Text Us: 301-401-5119 |
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