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My husband and I are applying for a loan. He's the loan applicant as I have tons of student loans, and still a bit of a mess. His scores are up and the middle (average) is 580. We have over 40 thousand down. (we saved this in cash, free and clear!!!) One problem...in 2006, he did a short sell on our house while we were divorced to avoid the bank having to foreclose on the house and him having to go into bankruptcy. The bank of course reported it as foreclosure on the bureaus, because it was started but then he negotiated payment arrangements with them. When the loan got to be too much, and the ARM went up, and we couldn't refi, he did the short sell. No balance owed. The credit report is clean. Not one single cent owed to anyone. One bureau even removed the old mortgage all together. We have an autistic son and we were going thru our divorce....these and other factors lead to him not being able to keep up with the mortgage. We're in the applying process, but I"m SO IMPATIENT. It's killing me waiting another week to know what underwriting is going to say. The automated system said "refer eligible" which means "a manual underwriter" needs to see it but it looks to be eligible. (that's what our mortgage loan officer told us) We want this so badly. Living in an apartment with an autistic child is not going so well, and we've finally gotten our marriage back on track.
So here are my questions....does it sound like we're gonna be able to get it? And are they accurate on still reporting it as a foreclosure when it was never actually foreclosed upon? (we have short sell documents) one bureau removed but the others still report it. Thanks in advance for any advice you may have!
I can't answer this since I'm not an expert but listening to many good advisers on tv like Suzie Orman and others...they all say wait with buying until your credit score is high otherwise you are going to pay more for your mortgage. Of course the down payment will help, but getting a loan with a 700 score is better than getting one with a 580 score. As far as I know a foreclosure stays on your credit report for 7 years, but you did a short sale and by doing that you didn't pay all of the mortgage back, otherwise it wouldn't be a short sale, so you failed to pay the whole loan off, so IMO it is only fair that it is showing (nothing against you and IMO it is better to do a short sale than to walk away), since others are paying what they own and you walked away from paying the 100% you owed and now 2 years later want to buy again... Can you imagine how people feel who never even owed a home and are trying to save to buy...
It is great you are having a second chance but IMO not smart to buy so soon with such a low score and with you having all this debt on your loans. Just my opinion.
1. FHA requires 3 years from discharge for foreclosure
2. If you included it in your BK then you would need to prove it
3. BK 7 requires 2yrs from discharge
4. BK 13 requires 1yrs from filing
5. NO lates in the last 12months!...NO lates PERIOD on student loans
6. You would need to have shown re-established credit history within the last 12months...usually with 3 tradelines.
Most loans under 600 require a manual underwrite, and that's normal.
You just need to make sure the lender does these unique FHA loans.
Quote:
Originally Posted by worried4kids
My husband and I are applying for a loan. He's the loan applicant as I have tons of student loans, and still a bit of a mess. His scores are up and the middle (average) is 580. We have over 40 thousand down. (we saved this in cash, free and clear!!!) One problem...in 2006, he did a short sell on our house while we were divorced to avoid the bank having to foreclose on the house and him having to go into bankruptcy. The bank of course reported it as foreclosure on the bureaus, because it was started but then he negotiated payment arrangements with them. When the loan got to be too much, and the ARM went up, and we couldn't refi, he did the short sell. No balance owed. The credit report is clean. Not one single cent owed to anyone. One bureau even removed the old mortgage all together. We have an autistic son and we were going thru our divorce....these and other factors lead to him not being able to keep up with the mortgage. We're in the applying process, but I"m SO IMPATIENT. It's killing me waiting another week to know what underwriting is going to say. The automated system said "refer eligible" which means "a manual underwriter" needs to see it but it looks to be eligible. (that's what our mortgage loan officer told us) We want this so badly. Living in an apartment with an autistic child is not going so well, and we've finally gotten our marriage back on track.
So here are my questions....does it sound like we're gonna be able to get it? And are they accurate on still reporting it as a foreclosure when it was never actually foreclosed upon? (we have short sell documents) one bureau removed but the others still report it. Thanks in advance for any advice you may have!
There's no bankruptcy. And we didn't owe them anything, because the sale price of the home took care of that. So, there was nothing charged off. Our mortgage lender is doing a manual underwriting and said that an explanation may take care of that "foreclosure." There are no student loans to be considered because he has none. We're in a position to pay this loan off within 4 years with our large down payment and the low cost of the home and our incomes. So, Idk if the interest rate will have as big of an impact? Have you ever heard of "refer eligible?"
The smaller the loan...the higher chance of the rate being higher.
Most FHA lenders will not lender less than 100k. In NC most lenders wont lend less than 120k due to the new NC high cost laws.
I'm not sure what circumstances you went through with the foreclosure but I have only heard that the underwriter will take 'extenuating circumstances' like death, serious medical reasons, etc
You maybe included on the loan or title, and this may vary per state/lender.
Refer/Eligible is very common with FHA loans...
You just need to have a lender that does 'manual underwriting' otherwise your loan will be decline.
Quote:
Originally Posted by worried4kids
There's no bankruptcy. And we didn't owe them anything, because the sale price of the home took care of that. So, there was nothing charged off. Our mortgage lender is doing a manual underwriting and said that an explanation may take care of that "foreclosure." There are no student loans to be considered because he has none. We're in a position to pay this loan off within 4 years with our large down payment and the low cost of the home and our incomes. So, Idk if the interest rate will have as big of an impact? Have you ever heard of "refer eligible?"
The smaller the loan...the higher chance of the rate being higher.
Most FHA lenders will not lender less than 100k. In NC most lenders wont lend less than 120k due to the new NC high cost laws.
I'm not sure what circumstances you went through with the foreclosure but I have only heard that the underwriter will take 'extenuating circumstances' like death, serious medical reasons, etc
You maybe included on the loan or title, and this may vary per state/lender.
Refer/Eligible is very common with FHA loans...
You just need to have a lender that does 'manual underwriting' otherwise your loan will be decline.
Thanks. I found out that the foreclosure was dismissed without prejudice as far as our county records go. So, it never was a full foreclosure. The underwriter is willing to look at it, so hopefully we'll get an approval. We have an autistic son with tons of old medical bills that we paid, none that are owing. Thanks for any and all info and input.
Thanks. I found out that the foreclosure was dismissed without prejudice as far as our county records go. So, it never was a full foreclosure. The underwriter is willing to look at it, so hopefully we'll get an approval. We have an autistic son with tons of old medical bills that we paid, none that are owing. Thanks for any and all info and input.
There's no bankruptcy. And we didn't owe them anything, because the sale price of the home took care of that. So, there was nothing charged off. Our mortgage lender is doing a manual underwriting and said that an explanation may take care of that "foreclosure." There are no student loans to be considered because he has none. We're in a position to pay this loan off within 4 years with our large down payment and the low cost of the home and our incomes. So, Idk if the interest rate will have as big of an impact? Have you ever heard of "refer eligible?"
How can that be a short sale? If you paid everything off than it was just a normal sale, and you shouldn't had a foreclosure on your report. I'm happy to hear that it is going to work out and wish you all the best.
How can that be a short sale? If you paid everything off than it was just a normal sale, and you shouldn't had a foreclosure on your report. I'm happy to hear that it is going to work out and wish you all the best.
I don't know either. I think maybe they just called it that?????? Not sure, have to find out more info I guess. my husband and I were divorced at the time. The deed that he signed over doesn't say short sell. There's no listing of a short sell at the court house. I think that the sale price of the home just barely paid off the loan? So, I don't know for sure. We're working on getting it removed from the credit report. Thanks for replying.
Of what we want to buy? the purchase price will probably be somewhere around 130. We have 50 thousand down. So the loan amt will only be like 80 thousand. Not sure if that's what the question was....
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