Mortgage Guidelines On Foreclosure And Bankruptcy

This BLOG On Mortgage Guidelines On Foreclosure And Bankruptcy Was UPDATED On June 26, 2017

  • If a mortgage loan borrower had a prior bankruptcy, there is a 2 year waiting period from the date of the bankruptcy discharge before a home buyer has to wait to qualify for a mortgage. 
  • If you have foreclosure but not a bankruptcy, there is a mandatory 3 year waiting period from the date of the sheriff’s sale or the date the deed of your house was transferred out of your name before a home buyer can qualify for a mortgage loan. 
  • The 3 year waiting period also applies for short sales and a deed in lieu of foreclosure as well.

Having a Foreclosure and Bankruptcy in Mortgage Qualification

What if you had a foreclosure and bankruptcy at the same time.

  • If you had a foreclosure and bankruptcy at the same time and your foreclosure was part of your personal bankruptcy, the 3 year waiting period will apply. 
  • Unfortunately, I get many calls from potential home buyers who think they are able to qualify for a home loan who had a foreclosure and bankruptcy 2 years prior. 
  • Unfortunately, these potential home owners get the bad news that they need to wait an extra year.

Home Loan after Foreclosure and Bankruptcy in Mortgage Qualification

I specialize in helping mortgage loan borrowers with prior bad credit and mortgage loan borrowers who have high debt to income ratios but I cannot do anything with the Federally mandated waiting period guidelines.

  • Mortgage borrowers with open collections, unsatisfied judgments, credit scores as low as 500, short term on the job, or are self employed can qualify for FHA Loans.
  • However, under FHA Mortgage Guidelines On Foreclosure And Bankruptcy borrowers who has a foreclosure and/or bankruptcy at the same time, there is a three year waiting period after the recorded date of the foreclosure to qualify for FHA Loans.
  • Under Fannie Mae and Freddie Mac Mortgage Guidelines On Foreclosure And Bankruptcy , borrowers with mortgage part of Chapter 7 bankruptcy can qualify for conventional loans four years from the discharged date of the Chapter 7 Bankruptcy.
  • The foreclosure can be recorded after the discharged date of the Chapter 7 Bankruptcy.

Rebuilding Credit After Foreclosure And Bankruptcy In Mortgage Qualification

Mortgage Guidelines On Foreclosure And Bankruptcy on government and conventional loans have mandatory waiting period. However, with NON-QM Loans, there are no waiting period to qualify for mortgage after bankruptcy and/or foreclosure.

  • Even though mortgage applicants have a waiting period requirements on government loans, they should consult with a loan officer if they qualify for non qm loans.
  • Loan officers can advise borrowers on how to rebuild credit and some will assist and advise on how to improve credit scores.

Borrowers who need more information on Mortgage Guidelines On Foreclosure And Bankruptcy or need to qualify for a mortgage, please contact us at 1-800-900-8569 or email us at gcho@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.

Leave a Reply

Your email address will not be published. Required fields are marked *