This Article Is About Qualifying For Mortgage After Foreclosure Being On Title But Not On Note
For home buyers with a prior foreclosure who were on the title but not on note of a home that is currently being foreclosed on, can qualify for a new mortgage loan. There is no waiting period requirement for a person who was on title to a home but not on the mortgage and the home foreclosed.
- This case scenario is very common where a husband and wife are living on a home that is currently under foreclosure where only one of they are on title but not on note
- Most lenders will consider this type of case scenario a bail
- However there are lenders that will do a deal where you are on title but not on note that is delinquent
- Even though homeowners are currently living in a house being foreclosed on, they can qualify as long as they are on title but not on note
- Waiting Period after foreclosure waiting period guidelines does not apply to those on title but not on note
Case Scenario From A Recently Closed Deal
I recently did a deal where the husband and wife were both on title and on the note several years ago. However, they got the home refinanced four years ago and the wife was just on the note but both the husband and wife were on title.
- Then the Great Recession of 2008 hit this country
- They both lost their jobs
- They both had to file for bankruptcy
- The home was not included in Chapter 7 bankruptcy
- They reaffirmed the mortgage after Chapter 7 bankruptcy
- After the bankruptcy, they fell behind on their mortgage
- Eventually , they could not afford their monthly mortgage payments and the home went into foreclosure
- They both waited the 2 year waiting period after bankruptcy discharged date
- They have rebuilt and reestablished their credit after bankruptcy discharge were ready to purchase another home since their current home was in foreclosure
- The fortunate part was that the husband was on title but not on note
- He qualified for a new FHA loan
- This holds true even though he was living in a home that was being foreclosed upon
- My client went to multiple lenders to qualify and get pre-approved for a mortgage with the above case scenario
- He got various different conflicting answers
- They told them they had their own overlays concerning him being on title but not on note so they could not do the mortgage loan
- Most lenders consider this type of case scenario a mortgage bail
- My client somehow found me via researching on the internet and asked me whether I could do the deal
- It was a no brainer for me because I have done many cases like these before many times over
The reason I can do deals like these is because I have relationships with wholesale lenders that have ZERO LENDER OVERLAYS. As long as we get a DU automated approval by Fannie Mae or LP AUS, I can process, underwrite, and close the loan.
Being On Title But Not On Note Is Not Fannie Mae/FHA Guideline
Being on title but not on note is perfectly legal and within Fannie Mae/FHA mortgage guidelines.
- However, many lenders do consider this a bail and will not do the mortgage loan
- I do have a handful of lenders that will do a type of deal like this as long as there are compensating factors
- You also need to take into consideration that many lenders will require rental verification
Living in a house that is being foreclosed on mean living rent free and getting a rental verification is not possible so you need to choose a lender that do not require a rental verification. Please contact us at Gustan Cho Associates at 262-716-8151 or text us for a faster response. Or email us at email@example.com. Or contact us at Gustan Cho Associates, www.gustancho.com, if you are in a similar situation like this and are ready to purchase a home and need a mortgage loan. Gustan Cho Associates is a national mortgage company licensed in multiple states with no lender overlays on government and conventional loans. We are experts not just on government and conventional loans, but we offer every non-QM loan program in the market. Some of our most popular non-QM mortgage programs at Gustan Cho Associates are mortgages one day out of bankruptcy and foreclosure, bank statement mortgages, non-QM Jumbo loans, and countless other alternative financing on primary homes, second homes, investment property loans, and commercial loans. The team at Gustan Cho Associates is available 7 days a week, evenings, weekends, and holidays.