How Can I Qualify For Mortgage After Foreclosure In California

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 the mortgage lender forecloses on the homeowner.  There are alternatives to foreclosures such as a deed in lieu of foreclosure and/or short sale.  California homeowners can qualify for mortgage after foreclosure in California. If you are going through a foreclosure or have recently went through a foreclosure, there are things you need to know about the foreclosure process, your rights, and the mandatory waiting period after a foreclosure is finalized before you are able to qualify for a residential mortgage loan.  The foreclosure process can be long and the rules and regulations concerning foreclosures can be tricky as well.

When Can I Qualify For Mortgage After Foreclosure In California?

Having a foreclosure is not the end of the world.  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 someone has had a foreclosure for that person to be able to qualify for a residential mortgage loan.  For conventional mortgage loan programs, there is a 7 year waiting period 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 mortgage lender.  For FHA insured mortgage loans, it is much more easier.

Qualifying For FHA Mortgage After Foreclosure In California

The mandatory waiting period after foreclosure for FHA insured mortgage loans is 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 homeowners name into the name of the mortgage lender.  The three year recorded date is extremely important.  Most people realize that just because they signed the foreclosure paperwork and turned in the keys that the waiting period start date is the date they surrenderred the keys and told the mortgage lender that they were out of the home.  This is not often the case.  The waiting time clock starts when your 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 your county’s recorder of deeds office.

What If The Deed Is Not Out Of My Name?

If you have a foreclosure and the deed is still in your name, you have major problems.  If the deed is still in your name and not in the mortgage lender’s name, your waiting period after a foreclosure of 3 years did not even start yet.  There are thousands of folks who thought they got foreclosed on many years ago find out that the deed is still in their names and that the waiting period time clock did not even begin yet.  I get calls every week from home buyers who thought they had passed the three year waiting period from a foreclosure many years ago and I find out that the waiting period after foreclosure time clock did not even begin yet.  Mortgage lenders who foreclose on homes are in no major hurry to transfer the deed in their names.  These mortgage lenders realize that this hurts the potential home buyer but they really do not care.  If you are currently going through a foreclosure or have recently gone through a foreclosure, make sure that your name has been transferred out of the deed and into the mortgage lender’s name and the paperwork has been recorded in your county’s recorder of deeds office.  It might be seem like a simple thing but it is simple to do, however, it is so crucially important.

What If My Foreclosure Was Part Of Bankruptcy?

Many folks had their foreclosure as part of their bankruptcy and the bankruptcy wiped out the mortgage loan.  However, just because your foreclosure is part of your bankruptcy, the waiting period does not start until the deed has been transferred out of your name into the mortgage lender.  When you have a foreclosure as part of your bankruptcy and get a bankruptcy discharge on the mortgage, it means you no longer owe the mortgage balance because it was discharged with the bankruptcy, however, now you own the home without a mortgage.  The house is still on your name and you need to get that home out of your name and into the name of the mortgage lender for the foreclosure waiting period time clock to start ticking so you can qualify for a mortgage loan three years from the recorded date of your foreclosure.  There are so many phone calls I get from potential home buyers who had filed bankruptcy and had the foreclosure 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 your bankruptcy, if the deed is still in your name, the waiting period after foreclosure had not started.

Qualifying For A Mortgage After Bankruptcy In California

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 your case, make sure you notify your mortgage lender.  If your mortgage lender blows you off, send them a certified letter telling them if they do not get the deed out of your 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, you can do that.  You actually own the home  free and clear with no mortgage because the mortgage balance got wiped out on your bankruptcy discharge.

FHA BACK TO WORK MORTGAGE LOANS: 1 YEAR WAITING PERIOD AFTER FORECLOSURE

HUD has launched a special mortgage loan program where it reduces the waiting period from three years to one year waiting period after foreclosure.  The Back to Work Extenuating Circumstances due to an economic event mortgage program was launched last August 15, 2013.  To qualify for FHA Back to Work Extenuating Circumstances due to an economic event mortgage loan program, the mortgage loan borrower needs to have been unemployed or underemployed six months prior to the initiation of the foreclosure and has at least a 20% reduction in his or her household income.  The Back to Work Extenuating Circumstances due to an economic event are all manually underwriting mortgage loans and a lot of weight is put on underwriter’s discretion.  The mortgage loan borrower needs to have had great credit prior to the loss of job and/or income.  The chances are that the borrower’s credit deteriorated during the foreclosure process but after the foreclosure, the mortgage loan borrower needs to have re-established credit and no late payments after the economic event.  Candidates for HUD’s FHA Back to Work Extenuating Circumstances due to an economic event mortgage program needs to complete a HUD approved counseling course and upon completion, needs a housing certificate signed and dated from the HUD approved housing counselor.  The mortgage loan borrower needs to wait 30 calendar day before he or she can complete and sign a mortgage application.

Mortgage After Foreclosure In California With No Lender Overlays

If you are seeking a home loan with bad credit and are a mortgage loan borrower from Illinois, Florida, Wisconsin, California, or California and feel that you qualify for HUD’s FHA Back to Work Extenuating Circumstances due to an economic event mortgage loan program, please contact me at 262-716-8151 or at www.gustancho.com .  I specialize in helping California home buyers obtain mortgage after foreclosure in California and dozens of other states with no lender overlays.

By Gustan Cho

www.gustancho.com

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.

Comments are closed.