This BLOG On Recorded Date In Foreclosure Versus Surrender Date Of Home Was PUBLISHED On June 18th, 2019
Most folks now realize that there are waiting periods to apply for a mortgage loan after a bankruptcy, foreclosure, short sale, and deed in foreclosure.
- 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
- The waiting period is 4 years from the date of the sale of the property or short sale date 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
In this blog, we will discuss Recorded Date In Foreclosure Versus Surrender Date Of Home and the waiting period requirements to qualify for a mortgage.
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 and has no intention on transferring the deed over to the lender’s name
- They realize that this will hurt the foreclosed homeowner and many do this on purpose
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
- 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.
What If The Lender Decides Start The Recorded Date In Foreclosure
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
- I guarantee you that the lender will transfer the deed so fast 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.
Update To This Mortgage Blog Article
This BLOG On Recorded Date In Foreclosure was updated on June 18th, 2019. 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 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 5% down payment. 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.