Financing in Greenville>Question Details

Cpearson1982, Home Buyer in Greenville, SC

I've been turned down for a USDA and FHA loan due to a Past due mortgage on my credit report. Should I even attempt a conventional loan now?

Asked by Cpearson1982, Greenville, SC Fri Aug 19, 2011

I have a past due mortgage from past marriage on credit report. It was in our divorce decree that I was to be held harmless from any debt, lien, etc BLAH BLAH BLAH from our marital residence. The ex was to refinance the house...he did not, it went into foreclosure in January '11 and was bought by an individual for $50k less than the mortgage amount in May '11. My LO wants to try a conventional loan now...should I even attempt it? Or give up?

Help the community by answering this question:

Answers

8
Hello, we specialize in these types of deals, if you are interested, please email us at carolinasouthholdings@gmail.com and we can send you some detailed information. We hope you get what you need. Thanks
0 votes Thank Flag Link Fri Jan 4, 2013
My loan was turned down by USDA and FHA, not the mortgage company. He said they just won't budge because the mortgage payment started going delinquent 3 months before my divorce decree was signed by the judge. My LO has everything I could possibly give him. One underwriter even told him that if I could get a judge to sign a paper that was dated BEFORE my divorce decree (like a legal separation), she would approve the loan. What in the world?! The divorce decree says everything that a legal separation would say. We did not disagree on any terms of the divorce, that's why there's no legal separation or temporary order...I told my LO to try for the conventional loan but I have zero faith at this point. It's unfortunate that you keep paying for your mistakes LONG after they have happened. I thought I had done the right thing by putting that in my divorce agreement, but that was not enough. FHA guidelines state that I have to wait 3 years from the date of foreclosure before I can apply for another loan...I'll be happy to get my earnest money back at least. Thanks all.
0 votes Thank Flag Link Mon Aug 22, 2011
I am so sorry to hear about the issues concerning your divorce, I truly understand first hand having gone through it myself. I have done several loans for people in your exact situation, unfortunately we are not licensed in your State of SC. But it is very simple, if the Superior Court Judge issued a judgment granting the home to your ex and you no longer have any legal rights to the property and it goes into foreclosure, yes the damage is done to your credit report, but we as your lender would view this as beyond your control and would not hold it against you. If I were you, I would ask your Loan Officer if his company or lender denied you or was it the USDA who denied it. There is a BIG difference!!! I've had success on this exact scenario on both a FHA and a USDA loan. The USDA file was a manual underwrite and the file had to be sent directly to the FEDS for underwriting, but it was approved because I had my t's crossed and my i's dotted with all the documentation supporting the case i.e. Final Divorce Decree with marital settlement agreement, proof that you were not living in the property and of course your income and asset qualifications, etc. I promise you there is a lender out there in your state that knows how to put together this file to go FHA or USDA, it's just a lot of work! But it can be done. Don't give up hope!

Best of Luck!
Web Reference: http://www.AFN-Loans.com
0 votes Thank Flag Link Sat Aug 20, 2011
Give up! Fannie and Freddie require you wait 7 years after a foreclosure.
0 votes Thank Flag Link Fri Aug 19, 2011
Hi,

I'm sorry....what you probably need is an attorney to go back into court and get an court order to get this off your credit report, if you can. The problem is that the lenders do not have to remove you from the bad debt, but you might be able to with a court order.

At the very least, you need to write an explanation of the facts with the credit bureaus but it doesn't really help your FICO.

What a mess...I'm so sorry. Talk to your attorney.

Karen
0 votes Thank Flag Link Fri Aug 19, 2011
You most likely will not qualify for a conventional loan. Ask the lender how to go about improving your credit in order to be eligible for a loan. Here are some suggestions:
1. If you find mistakes on your credit report, write a letter to the credit reporting agency explaining why you believe there is an error and send supporting documents.
2. If you have late payments on your credit report, write a letter explaining why the payments were late.
3. Pay every bill on time.
4. Use credit carefrully. Pay your credit card bills in full every month. If you can't do that, pay as much over the required minimum as possible.
5. Take care with the length of your credit. If you have had a credit card for a long time and managed it well, that works in your favor. Don't keep getting new credit cards.
6. Don't use all the credit you are offered. In other words, if you have $3,000 on each credit card, don't use it all.
7. Be patient. It takes time to get your credit score to go up.
0 votes Thank Flag Link Fri Aug 19, 2011
You most likely will not qualify for a conventional loan. Ask the lender who to go about improving your credit in order to be eligible for a loan. Here are some suggestions:
1. If you find mistakes on your credit report, write a letter to the credit reporting agency explaining why you believe there is an error and send supporting documents.
2. If you have late payments on your credit report, write a letter explaining why the payments were late.
3. Pay every bill on time.
4. Use credit carefrully. Pay your credit card bills in full every month. If you can't do that, pay as much over the required minimum as possible.
5. Take care with the length of your credit. If you have had a credit card for a long time and managed it well, that works in your favor. Don't keep getting new credit cards.
6. Don't use all the credit you are offered. In other words, if you have $3,000 on each credit card, don't use it all.
7. Be patient. It takes time to get your credit score to go up.
0 votes Thank Flag Link Fri Aug 19, 2011
You could ask whoever turned you down if you would qualify for a conventional.
Web Reference: http://www.321property.com
0 votes Thank Flag Link Fri Aug 19, 2011
Search Advice
Ask our community a question
Email me when…

Learn more

Copyright © 2016 Trulia, Inc. All rights reserved.   |  
Have a question? Visit our Help Center to find the answer