Update On 2016 Conventional Loan Guidelines After Deed In Lieu And Short Sale

New 2016 Conventional Loan Guidelines After Deed In Lieu And Short Sale

2016 Conventional Loan Guidelines After Deed In Lieu And Short Sale requires a 4 year mandatory waiting period after the deed in lieu of foreclosure and/or short sale. A deed in lieu of foreclosure is an alternative to foreclosure where the mortgage lender will accept a homeowner to voluntarily turn in his or her keys and deed to the property in lieu of the mortgage lending pursuing foreclosure proceedings. Foreclosure rates have never been as high in U.S. history like it has been during the 2008 Great Real Estate Meltdown where hundreds of thousands of homeowners lost their homes through bankruptcy and foreclosure. Thousands of homeowners had mortgage loan balances that were higher than the value of their homes and could not sell their properties. Homeowners turned to their mortgage lenders for loan modifications and alternatives to foreclosures. Two option mortgage lenders often offered to homeowners who were facing foreclosure were doing a deed in lieu of foreclosure or short sale.  Now, those who had a deed in lieu of foreclosure or short sale can qualify for a conventional loan after meeting the mandatory waiting period after deed in lieu of foreclosure and/or short sale.

2016 Conventional Loan Guidelines After Deed In Lieu And Short Sale Waiting Period

There is a four year mandatory waiting period to qualify for a conventional loan after a homeowner had a deed in lieu of foreclosure. However, the waiting period start clock does not begin until the deed of the property has been transferred out of the homeowners name into the name of the mortgage lender. Many folks think that the four year waiting period start period begins when they surrender the keys and the property to the mortgage lender, however, this is not the case. Many times, the deed does not get transferred out of the homeowners name into the name of the mortgage lender until years after the homeowner turned in their keys. This definitely hurts the home buyer. I have seen my share of cases where home buyers have called me to inquire about getting a mortgage loan approval and thought that they had their deed in lieu of foreclosure finalized years ago but still had the deed in their names. On case scenarios like this, the four year waiting period did not even start yet. Minimum down payment requirement to qualify for a conventional loan after a deed in lieu of foreclosure is 5% down payment.

There is a mandatory four year waiting period to qualify for a conventional loan after a short sale. The waiting period start clock starts from the date of the short sale which is reflected on the HUD’s Settlement Statement. Minimum down payment requirements to qualify for a conventional mortgage loan after a short sale is 5% down payment.

The old Fannie Mae Guidelines in qualifying for a conventional loan after a deed in lieu of foreclosure and/or short sale was a two year waiting period after a deed in lieu and/or short sale with 20% down payment. Unfortunately, Fannie Mae has discontinued the 2 year waiting period after deed in lieu and/or short sale conventional loan program back in 2014.

2016 Conventional Loan Guidelines After Bankruptcy And Foreclosure

There is a mandatory 7 year waiting period after foreclosure to qualify for a conventional loan. The seven year waiting period start clock begins on the date of the sheriff’s sale or the date that the deed was transferred out of the homeowners name into the name of the mortgage lender and recorded on public records and not the date that the homeowners turned in the keys or vacated the home.

There is a four year mandatory waiting period to qualify for a conventional loan after a Chapter 7 Bankruptcy. The waiting period clock starts from the discharge date of the Chapter 7 Bankruptcy.

There is a two year waiting period after a Chapter 13 Bankruptcy discharge. The waiting period start clock starts from the discharge date of the Chapter 13 Bankruptcy.

If you had a mortgage part of bankruptcy , there is a four year waiting period to qualify for a conventional loan. The waiting period start clock starts from the discharged date of the Chapter 7 Bankruptcy and the foreclosure can happen at a later date.

If you had a mortgage part of your Chapter 7 Bankruptcy, the waiting period to qualify for a FHA Loan is different than those of qualifying for a conventional loan. With FHA, if you had a mortgage, or mortgages, included in your Chapter 7 Bankruptcy, the waiting period time clock does not start until the date of the sheriff’s sale or the date that the foreclosure was transferred out of your name into the name of the lender or some other home buyer. This date will be later than the discharge date of the Chapter 7 Bankruptcy.

If you have a mortgage part of your Chapter 7 Bankruptcy and four years has passed since the date of your Chapter 7 Bankruptcy discharge date and need to qualify for a conventional loan, please contact me at 262-716-8151 or email us at gcho@gustancho.com. We are available 7 days a week to answer all of your questions, including evenings, weekends, and holidays.

The information contained on Gustan Cho Associates website is for informational purposes only and is not an advertisement for products offered by The Gustan Cho Team @ Gustan Cho Associates or its affiliates. The views and opinions expressed herein are those of the author and/or guest writers of Gustan Cho Associates Mortgage & Real Estate Information Resource Center website and do not reflect the policy of Gustan Cho Associates Lenders Network, its officers, subsidiaries, parent, or affiliates.

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