Let me start by saying we are in one of the most difficult financial times since the great depression. I don't think the answer to this question is easy I think the rules will change as I write this. The banks are struggling themselves and needed the government help to bail them out for bad loans. The 3 major auto manufacturers are also facing bankruptcy and need to be bailed out.

On the issue of buying a house after foreclosure,this has become a popular topic and a frequently asked question, due to the vast numbers of Americans who have been filing for foreclosure.

Unfortunately, there is no specific answer for it. So I will do my best to answer it in a general sense.

Let's start with the obvious. Buying a house after a foreclosure could be a challenging process. Most lenders will view your financial history as an indicator of what you are likely to do in the future. For example, if you missed several months of mortgage payments leading up to your foreclosure, then a lender will see you as a likely candidate for a future default on a loan -- in other words, a big risk.

There are plenty of variables that will be decided when banks address new lending guidelines in the future for persons with foreclosure. I believe if your trying to buy a house immediately after a foreclosure, is a lot harder than buying one two or three years down the road. The more time that goes by after your foreclosure, the better off you will be. I think 24-36 months gives you a chance to start establishing your credit worthiness again and start to show financial responsibility again, will enhance your chances at getting a mortgage again.

There's no doubt that when you go through a foreclosure process, your credit score takes a hit. This is one of the reasons so many people have trouble qualifying for a loan and buying another house after a foreclosure on a prior home. How badly the score is affected will depend on several things, such as a person's past financial history. So if you haven't done so already, you should request your credit score to see where you stand.

The more you can improve your credit score after a foreclosure process, the greater the chances of getting another mortgage loan down the road. Forgiveness exists in the lending industry ... it just comes slowly and gradually. Now you can understand the "time and good behavior" analogy.

As discussed earlier, the current condition of our current economy will make it harder to get a mortgage now than in the past. There are record numbers of foreclosures taking place. Financial institutions are falling down like dominoes. And as a result of all this, mortgage lenders are a lot stricter with their credit and lending policies.

In other words, buying a house after foreclosure is much more difficult today than it was in the past. Lenders are not just considering your financial health -- they are also considering their own financial health. If you've been watching the news lately, you'll know why.

Every home buyer / mortgage applicant will have a different experience when trying to buy a house after a foreclosure process. Some people will have a history of financial problems, so the foreclosure will affect them more severely. For others, the problem was an isolated one, so they'll be in a better position after the fact. So there's no way to say how foreclosure will affect people across the board -- except to say that it will certainly make things more challenging. If you do obtain another mortgage again you can count on the interest rate being higher than normal.
.
I think if when the economy rebounds buying a home down the road having a foreclosure during these hard economic times in my opinion will be different with the banks when they are stable again. The best thing you can do when buying a home after foreclosure is to be patient and proactive. Be patient, because it's going to take some time to improve your situation. But be proactive about improving your credit score. Remember you are not the only one who is facing foreclosure in these difficult times.