Financing in Riverside>Question Details

Mann7374, Home Owner in Riverside, CA

Hi, I am seeing a lot of conflicting information.

Asked by Mann7374, Riverside, CA Tue Oct 11, 2011

I just need to know how long does the deed in lieu stays on your credit and can you purchase a house after two years?

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12
I'm not real sure how long a Died in Lieu stays o credit....probably at least 7 to 10 like all the other major derogs.

FHA will require a 3 year waiting period to purchase again....unless they change that guideline.
VA has a 2 year waiting period to purchase.
USDA has a 3 year waiting period.
Conventional financing (Fannie/Freddie) is 2 years w/ 20% down payment or 4 years w/ 10% down payment.

If you have an extenuating circumstance, that may reduce the waiting period, but is on a case by case basis.
Web Reference: http://homeloanartist.com
2 votes Thank Flag Link Tue Oct 11, 2011
Mann7374,
Foreclosure stays on your credit on your credit 7 years.
Purchasing another home will require at least 10% down.
Waiting time is 2 - 3 years, and you must re qualify.
work history, credit, income, debt ratio etc.
Some have tried to get a "hard money loan" and pay a little more in costs and interest with less of a down.
Look up hard money loans for that. There is also alternative purchase options Owner will carry etc.

Harold Sharpe - Broker
So Cal Homes Realty
(951) 821-8211
harold@socalhomebuying.org
http://www.socalhomebuying.org
California Department of Real Estate Broker License # 01312992
1 vote Thank Flag Link Tue Oct 11, 2011
The reason you are seeing conflicting information because the answer is not down to a specific science. I agree with Deborah that a foreclosure reporting stay on your credit reports for 10 years. You will always have to disclosure the foreclosure on any future mortgage application, no matter how many years it is from now, and it may impact your terms. To be eligible to repurchase again after a foreclosure is typically 7 years.
0 votes Thank Flag Link Tue Jun 5, 2012
Old question, but still relevant. Short answer: All major (foreclosure, bankruptcy, etc) stays ON your credit for 10 years. That is 10 years from the date of discharge, not the beginning. After ten years you will not need to mention them again.

Now, how long after said incident before you can purchase a home is an entirely different question. And, it varies by guidelines, programs and circumstance. Talking with a mortgage professional is a good place to start.
0 votes Thank Flag Link Tue Jun 5, 2012
Yes, you can buy a home in one year, but it will be a cash purchase.
Yes, you can buy in two years but it will be seller financed.
Yes, you can buy in three years, but the mortgage will not be through 'big banks' and will be costly.
Yes, you can buy in five years, through special feature mortgages through second tier mortgage companies
Yes, you can buy in eight years if you have been successful in keeping your debt well under control
Yes, you can buy in ten years if you have been timely on all your payments.

Each and every options depends on YOU! The conflict exist in the assumptions regarding what you will and are able to do.
0 votes Thank Flag Link Wed Oct 12, 2011
Again, All these answers have merit. Each state has different foreclosure laws. If it were me, first I would speak to a real estate attorney, then a cpa, then a loan broker and then a real estate broker. I would be glad to give you some referrences if you like. Seeing that each situation is different, perhaps a conversation would be the best place to start. I am offering free consultation if you are interested. No charge, no obligation, 951-742-7752.
0 votes Thank Flag Link Tue Oct 11, 2011
Deed in lieu is essentially a foreclosure and therefore on the same level. I don't think anyone including an attorney or lender can tell you exactly how many years it will impact your credit but it's safe to say it's any where between 7-10 years, and will have lesser impact on your credit scores as the years go by. Good luck.
0 votes Thank Flag Link Tue Oct 11, 2011
Since you state the information received has been conflicting--to consider, and in order to best protect yourself, why not consult with an attorney who specializes in real estate, he/she can better advise as to what options work best for you.....
0 votes Thank Flag Link Tue Oct 11, 2011
All the answers have merit, in other words it all depends. In my experience, a deed in lieu is right up there with a short sale or a foreclosure. One benifit is the time of your late payments will be shorter than waiting for a foreclosure.With that said, more concern should be on your credit. Your credit will take a hit, but the amount of damage will be determined by the rest of your credit. If all of your credit went bad, then you credit will be hurt worse than if the only ding was the Deed in lieu. The credit damage will also be determined by the length of problem credit. What you need to do is correct what ever the problem was that made you do the deed in lieu of and start working on cleaning up your credit. You should talk to loan officers and credit repair companies to see where you are and what you have to do. FYI, I am not either of those so I do not have a dog in this fight. Good Luck.
0 votes Thank Flag Link Tue Oct 11, 2011
This is what I got from my lender a couple of months ago.

Deed in Lieu - Owner signs deed back to the lender need to watch out for verbiage in Deed In Lieu agreement regarding recourse.
Damage to borrower credit - Doesn't know thinks its about 100 points he thinks they are going to be considered like foreclosure, but unsure as he has not come across any buyers with this yet.

Forbearance - Lender takes money that owner owes (back payments or late payments) and will agree to spread that money owed over a set amount of time (12mo to 60 mo) tacked onto original payment that is owed to the lender. Once the agreement period is completed the original payment terms apply.
Damage to borrower credit - Doesn't know thinks its about 100 points he thinks they are going to be considered like foreclosure, but unsure as he has not come across any buyers with this yet.

If you would like more information call Craig Thomson (951) 347-0701
0 votes Thank Flag Link Tue Oct 11, 2011
The time frame will vary by loan program, the short answer is VA 2 years, USDA 3 years, FHA 3 years, Conventional 7 years. All of these terms are subject to change and some will have a shorter time frame if you can prove a hardship in the eyes of the new lender. You may be able to purchase in as soon as 2 years but it is not a given. I know you were looking for an absolute answer, but there isn't one that fits all lenders and borrower situations. Sit down with a local loan officer who can go over details of your specific situation.
0 votes Thank Flag Link Tue Oct 11, 2011
A deed in lieu will stay on your credit for 7 to 10 years. It will depend on what type of mortgage you apply for and if you re-establish your credit. The best person to meet with is a local and trusted loan officer who can guide you with what is available and what you may need to to for the future.
Web Reference: http://www.ScottSellsNH.com
0 votes Thank Flag Link Tue Oct 11, 2011
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