Here is the exact information from FHA which says it is not considered a foreclosure (hopefully you can send the lender this link and they'll reconsider): http://portalapps.hud.gov/FHAFAQ/controllerServlet?method=sh
Q: When underwriting the credit of an FHA borrower, should a foreclosure on a timeshare be considered a foreclosure on a mortgage or an unpaid consumer debt?
A: In the FHA underwriting process the default or foreclosure of a timeshare should be considered an unpaid consumer debt and not a foreclosure of a mortgage.
Shane Milne | Lending in all 50 states | NMLS #81195
shane@thebesthomeloans | 949-273-4161 direct
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