In this blog, we will discuss and cover the recorded date in foreclosure versus the surrender date of the home. Borrowers can qualify for a mortgage after a housing event.
There are three different types of housing events:
- Foreclosure
- Deed in lieu of foreclosure
- Short sale
There is a waiting period after bankruptcy, foreclosure, deed in lieu of foreclosure, a short sale on government, and conventional loans. There are non-QM loans one day out of bankruptcy and/or foreclosure with a 20% to 30% down payment.
Waiting Period Requirements After Bankruptcy and Foreclosure
Government and conventional loans have mandatory waiting period requirements. However, buyers with larger down payment can qualify for a mortgage with no waiting period requirements with non-QM loans. The waiting period requirements depend on the type of mortgage program. Each loan program have its own waiting period requirement after bankruptcy and/or a housing event. Besides meeting the minimum waiting period requirements, borrowers need to rebuild and re-establish credit after bankruptcy, foreclosure, short sale, and deed in foreclosure. Gustan Cho Associates offers non-QM mortgages one day out of foreclosure and bankruptcy. However, the non-QM loans one day out of foreclosure and bankruptcy requires a 30% down payment. A prior bankruptcy, foreclosure, deed in lieu of foreclosure, a short sale does not have any pricing impact on mortgage rates.
Waiting Period Guidelines After Bankruptcy And A Housing Event On Government And Conventional Loans
Government and Conventional Loans have waiting period requirements after bankruptcy and foreclosure.
Below are the mandatory waiting period guidelines after bankruptcy, foreclosure, deed in lieu of foreclosure, short sale:
- The waiting period for bankruptcy is 2 years from the date of the bankruptcy discharge on FHA and VA loans
- For a short sale, it is three years from the date of the sale of the property for an FHA and USDA .loans
- There is a four year waiting period after a deed in lieu of foreclosure and/or a short sale to qualify for conventional loans
- There is a two year waiting period after the Chapter 13 Bankruptcy discharged date to qualify for conventional loans
- There is a four year waiting period after the Chapter 13 Bankruptcy dismissal date to qualify for conventional loans
- There is a seven-year waiting period after a regular foreclosure to qualify for conventional loans
- 3% to 5% down payment is required on conventional loans
- VA loans require a two year waiting period after foreclosure, deed in lieu of foreclosure, short sale, bankruptcy
- Non-QM Loans do not have mandatory waiting period requirements after foreclosure, deed in lieu of foreclosure, short sale, bankruptcy
- However, with a deed in lieu of foreclosure and/or foreclosure, it can be tricky
- Millions of Americans have fallen victims because the lender has not transferred out of the borrower’s name and into the lender’s name
Waiting Period Start Date Is The Recorded Date In Foreclosure
The waiting period for those who have had a deed in lieu of foreclosure or a foreclosure starts from the date of the sheriff’s sale or the date when the deed of the home was transferred out of their name and into the name of the mortgage lender. Just turning in the keys to the mortgage lender is not good enough. Most lenders will take the keys from the homeowner with no intention of transferring the deed over to the lender’s name. They realize that this will hurt the foreclosed homeowner. Many do this on purpose. Make sure the deed has been transferred out of your name as soon as possible. The start date of the waiting period is the date your name has been transferred off the name of the deed to someone else’s name.
Mortgage Included In Bankruptcy
I run into situations where folks have had a deed in lieu of foreclosure and have included the deed in lieu of foreclosure as part of the bankruptcy. They assume that the waiting period starts from the date of the bankruptcy discharge date. They work diligently in re-establishing their credit and wait the three-year waiting period and contact me to qualify them for a mortgage. Unfortunately, in many cases, I cannot qualify the potential homeowner. This is because even though they have included their deed in lieu of foreclosure as part of their bankruptcy, the deed is still not out of their name.
The Importance of Knowing The Actual Waiting Period Start Date After Foreclosure To Qualify For A Mortgage
For those folks who have this problem, the waiting period has not even started yet. They need to get the deed out of their name and into the bank’s name immediately and then the three-year waiting period clock starts ticking. It is extremely unfortunate but there are no loopholes in the system to get around this. Bankruptcy attorneys should have caught this but the mortgage rules and regulations are so complex that many real estate attorneys still do not know this important matter.
Lenders Not Rushing To Change the Name on the Deed After the Homeowner Surrenders the Home
I know of several dozen cases where the mortgage lender would not transfer and record the deed of the foreclosed home out of their name into their name. In cases where you have had the deed in lieu of foreclosure as part of your bankruptcy, you own the house free and clear. This is because the mortgage was wiped out in the bankruptcy. You are offering the deed to your property back to the bank and the bank is not willing to take it. Technically, you own the home free and clear of no mortgage. I would notify and threaten the mortgage lender that you are planning on selling the foreclosed home since it is under your name and list the property. This will catch the attention of the lender and may take action to transfer the deed out of your name. Legally, you can sell the home and keep all the proceeds of the sale of the home since the deed is still in your name and the bank refused to transfer it to their name. However, this is normally not possible because the lender still has a first lien on the property.
Recorded Date In Foreclosure: Update To This Mortgage Blog Article
This BLOG On Recorded Date In Foreclosure was updated on March 1st, 2022. There have been many changes since this mortgage article blog post has been written and published on Gustan Cho Associates. First, Fannie Mae no longer has the 2-year waiting period for a conventional loan with a 20% down payment after a two-year waiting period after short sale and deed in lieu of foreclosure. Fannie Mae now requires a mandatory four-year waiting period after a deed in lieu of foreclosure and short sale to qualify for a conventional loan with a 5% down payment.
Recorded Date In Foreclosure: Waiting Period After Bankruptcy and Foreclosure If You Have a Prior Mortgage Included as part of Bankruptcy
On another positive note, if you had a mortgage loan as part of your bankruptcy, the waiting period starts from the discharge date of your bankruptcy. Not the Recorded Date In Foreclosure of the deed where the deed is transferred out of your name into the lender name. The housing event does need to be finalized. We will keep on updating this blog as new changes update on Fannie Mae and Freddie Mac Agency Guidelines. If you have any questions about the content in this blog and/or other mortgage-related topics, please contact us at Gustan Cho Associates at 800-900-8569 or text us for a faster response. Or email us at alex@gustancho.com. The team at Gustan Cho Associates is available 7 days a week, evenings, weekends, and holidays.
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Hello,
Where in the HUD manual states that if you had a mortgage loan as part of your bankruptcy, the waiting period starts from the discharge date of your bankruptcy. Not the Recorded Date In Foreclosure of the deed where the deed is transferred out of your name into the lender name. The housing event does need to be finalized.?
ileana
The waiting period start date with a mortgage included in bankruptcy is four years from the discharged date of the bankruptcy on conventional loans and NOT FHA LOANS. Therefore, it is not on the HUD GUIDELINES. It only applies on Fannie Mae and/or Freddie Mac Guidelines which are conventional loans.
My husband foreclosed on a house before we were married. Additionally he filed bankruptcy yet he does not have the paperwork nor the details of his bankruptcy and his lawyer is no longer practicing law. Additionally, the lawyer did not include the foreclosure in his bankruptcy thus we are told we need to find the sheriff’s sale date. How do we get copies of the bankruptcy and find when the sheriff’s sale date was on his foreclosure?
Bankruptcy and foreclosure are public records. You can go to public records and should be able to retrieve them.