Mortgage After Foreclosure California Requirements For Home Buyers

Homebuyers in California can qualify for a mortgage after foreclosure with no waiting period one day out of foreclosure.

This Article Covers Mortgage After Foreclosure California Requirements for Home Buyers

Millions of homeowners went through a foreclosure due to the economic collapse of 2008.

  • A foreclosure happens when a homeowner no longer can afford their monthly mortgage payments and defaults on their note
  • The lender forecloses on the homeowner

There are alternatives to foreclosures such as:

  • deed in lieu of foreclosure
  • short sale
  • loan modification
  • workout

California homeowners can qualify for a mortgage after foreclosure California with no waiting period with non-QM loans.

Can I Qualify for a Mortgage After A Housing Event?

Can I Qualify for a Mortgage After A Housing Event?

A housing event is any of the following:

  • Foreclosure
  • A deed in lieu of foreclosure
  • A short sale

In this article, we will cover the following topics:

  • The foreclosure process
  • Qualifying for a traditional after a housing event
  • Government versus conventional loans
  • Mortgage included in bankruptcy
  • Non-QM loans one day after a housing event
  • Qualifying for a mortgage with a lender that is an expert on non-QM and traditional loans

Understanding the Foreclosure Process

Homeowners going through a foreclosure or have recently gone through a foreclosure, there are things they need to know about the foreclosure process:

  • rights
  • the mandatory waiting period after a foreclosure is finalized before they are able to qualify for a government or conventional loan
  • The foreclosure process can become a long process
  • Rules and regulations concerning foreclosures can be tricky as well

In this article, we will cover and discuss qualifying for a mortgage after a housing event.

Waiting Period Requirements On Government And Conventional Loans

Millions of homeowners in California were forced into foreclosure due to the Great Recession of 2008 and mortgage meltdown. However, there are mandatory waiting periods after foreclosure to qualify for government and conventional loans.

For conventional mortgage loan programs, there is a 7 year waiting period after the recorded date of the foreclosure. There is a four-year waiting period after a short sale and/or deed in lieu of foreclosure.

The waiting period start date is from the date of the sheriff’s sale or the date the homeowner’s name has been transferred out of their name into the name of the lender. For FHA Loans the waiting period is much shorter.

No Waiting Period To Qualify For Mortgage After Foreclosure California

Having a foreclosure is not the end of the world.

Gustan Cho Associates are lenders with no overlays on government and conventional loans We are correspondent lenders and brokers on non-QM loans. Gustan Cho Associates has dozens of wholesale lending relationships with non-QM lenders.

There are no waiting period requirements on non-QM loans after foreclosure, deed in lieu of foreclosure, short sale. There is no waiting period after the Chapter 7 Bankruptcy discharged date. 680 credit scores require a 10% down payment. 660 credit scores require a 15% down payment. A 20% down payment on credit scores of 640.

The minimum credit score to qualify for NON-QM Loans is 500 FICO. However, if the bankruptcy and/or foreclosure has not been seasoned, a 30% down payment is required.

FHA Mortgage After Foreclosure California

What does post-foreclosure FHA mortgage mean in California

HUD requires three years from the date of the sheriff’s sale of the foreclosed property or the date the deed of the home was transferred out of the homeowner’s name into the name of the lender on FHA loans. The three-year recorded date is extremely important.

Most people realize the waiting period start date is the date they surrendered the keys. Most homeowners are under the impression the foreclosure start date is the date they turned in their keys. This is not often the case.

The waiting time clock starts when the homeowner’s name is completely out of the deed of the home and recorded into the mortgage lender’s name. This date needs to be recorded in the county’s recorder of deeds office.

What If The Deed Is Not Out Of My Name?

If the deed is still in the homeowner’s name and not in the lender’s name, the waiting period after a foreclosure did not even start yet. There are thousands of folks who thought they got foreclosed many years ago and find out that the deed is still in their names.

The waiting period time clock did not even begin yet. I get calls every week from homebuyers who thought they had passed the three-year waiting period. many years ago. I find out that the waiting period after the foreclosure time clock did not even begin yet to qualify for FHA Loans.

Lenders who foreclose on homes are in no major hurry to transfer the deed in their names. Lenders realize that this hurts the potential home buyer but they really do not care.

Make sure the paperwork has been recorded in the county’s recorder of deeds office. It might seem like a simple thing but many do not realize that the waiting period clock did not start. However, it is so crucially important.

What If My Mortgage Was Part Of Bankruptcy?

Mortgage Part Of Chapter 7 Bankruptcy To Qualify For FHA Loans

Many folks had their foreclosure as part of their bankruptcy and the bankruptcy wiped out the mortgage loan.

However, just because mortgage is part of Chapter 7 bankruptcy, the waiting period does not start until the deed has been transferred out of name into the mortgage lender with government loans (FHA, VA, USDA).

Homeowners with a mortgage as part of the bankruptcy no longer owe the mortgage balance. The mortgage discharges with bankruptcy. However, now they own the home without a mortgage. The house is still in their name with no mortgage. The four-year period to qualify for a conventional loan starts on the discharged date of the bankruptcy.

On FHA loans, borrowers need to get that home out of their name and into the name of the mortgage lender. The date the deed is transferred out of the homeowner’s name is the date the waiting period is in effect. The bankruptcy discharged date does not matter on FHA loans.

There are so many phone calls I get from potential home buyers who had filed bankruptcy and had mortgage part of the bankruptcy but the deed is still in their names.

Even though the bankruptcy might be three or more years old and the mortgage was part of bankruptcy if the deed is still in their name, the waiting period after foreclosure had not started with FHA loans.

Conventional Loans With Mortgage Part Of Chapter 7 Bankruptcy

Conventional Loans have different lending guidelines with mortgage part of Chapter 7 Bankruptcy.

Homeowners with foreclosure and the deed are still in their name can have issues. The waiting period starts once the deed has been transferred out of the name of the homeowner.

The only exception is when borrowers have a mortgage part of Chapter 7 Bankruptcy. With conventional loans, there is a four-year period after the discharged date of Chapter 7 Bankruptcy if the mortgage was part of Chapter 7.

On conventional loans, the recorded date of foreclosure and/or short sale date does not matter. The housing event is effective after the discharged date of the bankruptcy. Borrowers will not re-affirm the mortgage after bankruptcy.

Waiting Period Requirements After Bankruptcy & Housing Event

What are the post-bankruptcy waiting period and housing event requirements?

The bankruptcy waiting period after a bankruptcy to qualify for a mortgage loan is two years, which it already passed but the foreclosure waiting period did not even start yet.

If this is the case, make sure to notify the lender.

If the mortgage lender does not cooperate, send them a certified letter telling them if they do not get the deed out of the homeowner’s name and into their name and record it in five business days that you are going to sell the property and keep the proceeds.

Technically, homeowners can do that. However, the lender does have the first lien position. Bankruptcy discharges home mortgages.

Qualifying for a Mortgage After Foreclosure with a Lender That is an Expert in Traditional and Non-QM loans

Home Buyers seeking a home loan with bad credit with a direct lender with no mortgage overlays on government and conventional loans, please contact us at Gustan Cho Associates at 262-716-8151 or text us for a faster response. Or email us at [email protected]  We specialize in helping borrowers secure home buyers obtain a mortgage after foreclosure in California and dozens of other states with no lender overlays.

2 Comments
  1. Michelle De La Cruz says

    Would you be able to help me if I am currently in a NOD and need help fast?

    1. Gustan Cho, NMLS 873293 says

      Please contact us at 262-716-8151 or text us for a faster response. Or email me at [email protected]. What state are you in?

Leave A Reply

Your email address will not be published.

Call Now ButtonCALL NOW