We are currently in the process of getting pre-approved on a mortgage and I have a question for the experts here. We had an FHA guaranteed loan foreclosed in 1998. Our final foreclosure date was 6/98 so it is four years old but the date delinquent was 6/97 which means I have 2 more years for it to come off the reports. I have tried several times but they keep verifying. It was a FHA mortgage and our credit report says the balance is zero and FHA redeemed. I have called the original mortgage company and they are sending me a letter that states the balance owing is zero. My question is, will this be all that is required to obtain a mortgage? This is the only negative and the broker said our FICO scores were 690 and 650 for the wife and I. Do I have to get something from FHA also and if so, where do I go to get this? Would this prevent us from getting an FHA loan? Has anybody else dealt with a foreclosure more than 4 years old? What happened and what hoops did you have to go through? We have time to get the paperwork in order since we haven't found a home yet. I just want to get everything out of the way so that I don't get blindsided down the road. The broker says no problem, but I'm looking for peace of mind. The one thing I have learned from this board is if you are proactive versus reactive you can sometimes catch them off guard. My journey began last year with scores in the low 500's and I cannot tell you how much help this site has been. Everything I have done has been as a result of something I read here.
The foreclosure has to be 3 years ago and if it was in 1998 then you should be just fine. You can actually get another FHA loan as long as the old bad one is 3 years.
I challenged the mortgage on the bureau as payments inaccurate. (They were! They had me late more times than the life of the loan! LOL) Foreclosure deleted. Gotta love it!
I have tried everything I could think of over the last year to get this last derog off experian and have had no luck. I was able to get them off Trans Union and Experian but Equifax verifies them every time. I haven't tried to dispute the number of lates so it may be worth one more attempt.
rond1234 Normally as long as the foreclosure is over 3 yrs old, then you should have no problem getting another FHA loan. Especially if there is a 0 balance showing. Hope this helps and good luck on the mortgage quest. fla-tan
Normally as long as the foreclosure is over 3 yrs old, then you should have no problem getting another FHA loan. Especially if there is a 0 balance showing. The zero balance is with the original mortgage company and then it says FHA Redeemed. Does that mean that FHA paid the balance, and if so would I not have to get it cleared with FHA also? I spoke with the Mortgage company and they are sending me a letter that says the balance for them is zero. However, I saw here where the FHA guidelines were that you could not qualify for FHA financing with any outstanding debt to the Government. If the FHA paid the loan would they not have it listed as outstanding debt? It doesn't appear on the credit report but I am wondering if it may come up down the line. I'm not sure how the FHA guaranteed morgage program works and what they mean by the 3 years before they will finance you again. We had equity in the home that would have paid most of the costs but what if the FHA had to step in to pay any deficiency? How would I know if they did and would I have to settle with them first? I don't want to put an offer on a home and then find out one week before closing that I don't qualify for FHA financing because they paid anything on this loan.
The whole idea of FHA and that huge amount of FHA insurance you pay is exactly for this reason. You pay the insurane so that if you do lose the house FHA pays it off and you do not owe a single dime after they purchased it. Think of it this way. You pay car insurance so that if you wreck the car then the insurance pays for it and you do not owe anything for it. The FHA is the same way. You are not going to get a turn down from the FHA. The underwriters will make a decision based on FHA guidelines. As long as you have 12 months clean history which shows them you have been trying and do not have a foreclosure within the last 3 years and you must have paid off all unpaid collections,chargeoffs,ect then you are fine. We are doing a FHA loan right now outselves. If you want to have some real fun find an agent or broker who is familiar with the ameridream program. IT is the same as FHA except the seller pays the downpayment and the house still has to pass FHA guidelines. The housing market is a huge buyers market now. There are thousands of houses on the market where I live that have been rotting there for months. When we go make an offer you can be sure that we will make them sign up for ameridream and pay the 3% down payment and we will make sure they make all closing costs and prepays too. Man I love being in the market now with the interest rates and the housing bubble.
Thanks picantel I never really understood how that whole thing worked. I should have been thinking of it as insurance instead of as another bank involved in the deal that would have their hand out. It is funny how different the housing market is in different parts of the country. In my market, when a house goes up for sale and is priced right they can have up to 5 offers within a week. It is a huge sellers market by me and it makes it very difficult to find a deal unless it has major problems. My neighbor put his home up for sale in the mid 200's on July 26th and had 3 offers by July 31st. They then gave it to who was willing to pay the most. It has been unreal around here with the new construction and home prices going up with no end in sight.
rond1234 An FHA certified lender can go to a site to verify if you are on an FHA negative list. If so, then you will not be able to qualify for an FHA loan until after the deficiency is cleared up. If you need additional info and want to, you can email me off-board and I will answer you. Good luck fla-tan
There is an LDP/GSA list that all FHA lenders pull for every FHA file. Its in the FHA guidelines to do, even on refi transactions. If your name is on the list, automatic denial. Im an FHA processor for a mortgage lender. Even though I believe the responses are accurate regarding the 3 year rule, some lenders may have their own guidelines. Tell you what, I'll research HUD tonight & see what I can come up with for you, alot of the site is password protected.
Here is the web addresss where you can check to see if you are on either of the lists. I apologize, I don't yet know how to post it in a link. But Im gonna try http://www.hud.gov/library/bookshelf16/ldp.cfm I will have to check the 4155 (HUD bible) tomorrow to see what it says about previous f/c, I had a hard time navigating the web site tonight. BTW, there is alot of info there that is accessable to the public, I never realized that before. Hope this helps somewhat
TM Thanks for the great link. I see the LDP list but not the GSA list, is the GSA and debarments list on your link the same thing? I would have thought with IRS liens, Student Loans, and other government debts that those lists would be much larger. Are they pulling those from credit reports? Thankfully, I do not have any of those debts. My worry was whether the FHA insured foreclosure I did have 4 years ago would put me on a negative list, and it appears it does not. However, I have often wondered how they blacklist people for FHA housing if they had old IRS or Student loan debts that no longer show up on credit reports. I spoke with the Mortgage Broker today and found out that with our scores and credit they were not using FHA financing, so I worried for nothing. However, this information is good to know in the future or if someone is looking at getting FHA financing. Thanks again for the insight.
