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By Chris Sorensen | Real Estate Pro in California
  • August 15, 2013 FHA Waives Short Sale & Foreclosure Waiting Periods

    Posted Under: Home Buying in Los Angeles, Agent2Agent in Los Angeles, Credit Score in Los Angeles  |  August 19, 2013 6:44 AM  |  2,341 views  |  1 comment
    Read The USA HELP Blog.  A 501C-3 http://www.help.freehomeownershiphelp.org/?p=2416

    FHA has waived its 3-year foreclosure-waiting period. Mortgagee Letter 2013-26 Released August 15, 2013. The FHA Back To Work – Extenuating Circumstances program ends September 30, 2016.

    Effective for FHA Case Numbers assigned on, or after, August 15, 2013, borrowers with a recent history of bankruptcy, foreclosure, judgment, short sale, loan modification or deed-in-lieu can apply and get FHA-approved for an FHA-insured mortgage.

    If you’ve experienced any of the following financial difficulties, you may be eligible :
    Pre-foreclosure sales
    Short sales
    Deed-in-lieu
    Foreclosure
    Chapter 7 bankruptcy
    Chapter 13 bankruptcy
    Loan modification
    Forbearance agreements

    Here are some “Back To Work” FAQ’s;

    Q: Can I use the FHA Back To Work program as a first-time home buyer?
    A: Yes, you can use the FHA Back To Work program as a first-time buyer.

    Q: Can I use the FHA Back To Work program as a repeat home buyer?
    A: Yes, you can use the FHA Back To Work program as a repeat home buyer.

    Q: Does the FHA Back To Work program waive the traditional 3-year waiting period after a foreclosure, short sale, or deed-in-lieu?
    A: Yes, the FHA Back To Work program waives the agency’s three-year waiting period. You no longer need to wait three years to apply for an FHA loan after experiencing a foreclosure, short sale or deed-in-lieu.

    Q: Does the FHA Back To Work program waive the traditional 2-year waiting period after bankruptcy?
    A: Yes, the FHA Back To Work program waives the agency’s two-year waiting period. You no longer need to wait two years to apply for an FHA loan after experiencing a Chapter 7 or Chapter 13 bankruptcy.

    Q: Which types of “events” are covered by the FHA Back To Work – Extenuating Circumstances program?
    A: The FHA Back To Work – Extenuating Circumstances program can be used by anyone who’s experienced a pre-foreclosure sale, short sale, deed-in-lieu, foreclosure, Chapter 7 bankruptcy, Chapter 13 bankruptcy, loan modification; or who has entered into a forbearance agreement.

    Q: How do I apply for the FHA Back to Work – Extenuating Circumstances program?
    A: You can apply for an FHA Back to Work – Extenuating Circumstances mortgage with any FHA-approved lender. The mortgage approval process is the same for any other FHA-insured mortgage. Click here to get rates before you apply.

    Q: What are mortgage rates for the FHA Back To Work program?
    A: Mortgage rates for the FHA Back To Work program are the same as mortgage rates for any other FHA loan. There is no premium on your interest rate, nor are there additional fees to pay at closing. Your mortgage rate will be unaffected by the FHA Back To Work program.

    Q: My current lender says that it’s not participating in the program? What do I do?
    A: If your current lender is not participating in the FHA Back To Work program, you can find another lender.

    Q: What are the minimum eligibility requirements of the FHA Back To Work program?
    A: In order to qualify for the FHA Back To Work program, you must meet several minimum eligibility standards. The first is that you must have experienced an “economic event” (e.g.; pre-foreclosure sale, short sale, deed-in-lieu, foreclosure, Chapter 7 bankruptcy, Chapter 13 bankruptcy, loan modification, forbearance agreement). The second is that you must demonstrate a full recovery from the event. And, third, you must agree to complete housing counseling prior to closing. You must also show that your household income declined by 20% or more for a period of at least 6 months, which coincided with the above “economic event”.

    Q: How do I document a 20% loss of household income for the FHA?
    A: In order to document a 20% loss of household income, you must present federal tax returns or W-2s, or a written Verification of Employment evidencing prior income. For loss of income based on seasonal or part-time employment, two years of seasonal or part-time employment in the same field must be verified and documented as well. Income after the onset of the economic event, which should represent a loss of at least 20% for at least six months, should be verified according to standard FHA guidelines. This may include W-2s, pay stubs, unemployment income receipts, or other. Your lender will help you determine the best method of verification.

    Q: How do I document a “satisfactory” credit history since my “economic event” for the FHA?
    A: Your lender will review your credit report as part of the FHA Back To Work approval process. All accounts will be reviewed ones, which went delinquent, and ones, which remained current. Your lender will attempt to determine three things; that you showed good credit history prior to the economic event; that your derogatory credit occurred after the onset of the economic event; and, that you have re-established a 12-month history of perfect payment history on major accounts. Minor delinquencies are allowed on revolving accounts.

    Q: Does the “20 percent loss of income” eligibility condition apply to me only, or to everyone in the household?
    A: The “20 percent loss of income” eligibility condition applies to everyone in the household. If one member of the household lost income as the result of a job loss but the household income did not fall by 20 percent or more for a period of at least six months, the borrower will not meet the FHA “Back To Work” Extenuating Circumstances.

    Q: Is the FHA Back To Work Program limited by loan size?
    A: No, the FHA Back To Work Program is not limited by loan size. The FHA will always insure up to your area’s local FHA loan limit. Your lender, however, may not. You may need to shop around.

    Q: Is there a counseling requirement in order to use the FHA Back To Work program?
    A: Yes, in order to the use the FHA Back To Work program, you must agree to attend housing counseling.

    Q: Why do I need to take housing counseling for the FHA Back To Work program?
    A: The housing counseling required by the FHA Back To Work program will address the cause of your economic event, and help you consider actions which may prevent re occurrence.

    Q: How long is the housing counseling session I am required to take?
    A: The housing counseling required for the FHA Back To Work program will typically last one to four hours.

    Q: Do I have to take housing counseling in-person?
    A: No, you do not have to take the housing counseling in-person. Housing counseling may also be conducted by phone or via the internet.

    Q: If I complete counseling, am I automatically approved for the FHA loan?
    A: No, you are not automatically approved for the FHA loan if you complete the housing counseling required by the FHA Back To Work program. You must still qualify for the FHA mortgage based on Federal Housing Administration mortgage guidelines.

    Q: What is the minimum credit score requirement for the FHA Back To Work program?
    A: There is no minimum credit score requirement for the FHA Back To Work program, necessarily. The program follows standard FHA mortgage guidelines. Credit scores below 500 are not allowed, but borrowers with no credit score whatsoever remain eligible. The Federal Housing Administration doesn’t change mortgage rates based on credit score.

    Q: Are modified mortgages eligible for the FHA Back To Work program?
    A: Yes, modified mortgages are eligible for the FHA Back To Work program.

    Q: Are loans on a payment plan eligible for the FHA Back To Work program?
    A: Yes, loans on a payment plan are eligible for the FHA Back To Work program.

    Q: I am still in Chapter 13 bankruptcy. Do I need the court’s permission to enter into the mortgage?
    A: Yes, if your Chapter 13 bankruptcy has not been discharged prior to the date of your loan application, you must have written permission from Bankruptcy Court to enter into the purchase transaction.

    Q: When does the FHA Back To Work – Extenuating Circumstances program end?
    A: The FHA Back To Work – Extenuating Circumstances program ends September 30, 2016. Source: FHA Mortgagee Letter and Dan Green.

    http://portal.hud.gov/hudportal/HUD?src=/program_offices/administration/hudclips/letters/mortgagee

  • Free Class Intended For The Public, But All Welcome To Attend.

    Posted Under: Home Selling in Los Angeles, Foreclosure in Los Angeles, Credit Score in Los Angeles  |  January 25, 2012 6:00 PM  |  1,202 views  |  No comments
  • How Do I Clean Up My Credit?

    Posted Under: Credit Score in California  |  February 17, 2010 6:43 AM  |  663 views  |  No comments

    Cleaning up credit can be a huge challenge. Technically, there is really nothing that you can't do on your own in this arena. The problem most people have is the lack of understanding of the law and the time it takes to resolve disputed items.

    The Fair Credit Reporting Act, which governs credit reporting, says that only a state's attorney general can sue a creditor for furnishing inaccurate information. But if the creditor doesn't fix the inaccuracy permanently and in a reasonable time, you can sue, even though the Fair Credit Reporting Act doesn't explicitly give you that option.

    When a creditor reports a problem to a bureau, the consumer challenges it and the bureau asks for a clarification, two things can happen, the credit bureaus say. First, the creditor can correct the information. Second, it can come back and say the information has been confirmed.

    The next recourse to the consumer is to deal with the credit grantor to arrive at a solution.

    The credit bureaus won't venture forth to check public documents such as court judgments and county property records, but they will accept copies of supporting documentation from consumers. In rare cases they might even repair a consumer's credit record based on such documents.

    Here is a 40 page book I found that explains everything you want to know and then some on cleaning up credit. If you take a couple of hours to read this, I assure you, you will be able to interivew "companies" much better.

    I hope this helps:

     http://www.expert-credit-advice.com/formletters/Credit%20Helper%20Book.pdf

 
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