I have seen some of the big box retail lenders take 1-3 years to properly record the title transfer back to their name.....no good, so make sure your attorney did his job and followed up with the bank to make sure that was done ASAP (most don't).
You might find some good info in my blog post web reference below about being able to qualify and buy sooner after foreclosure if you have an allowable extenuating circumstance.
â€¢ FHA requires 2-years BK discharge (only 1 year if it was due to extenuating circumstances, such as medical or death of a wage earner, etc.)
â€¢ VA requires 2-years BK discharge (only 1 year for extenuating circumstances)
â€¢ USDA requires 3-years BK discharge (only 1 year for extenuating circumstances)
â€¢ Fannie Mae & Freddie Mac require 4 years (only 2 years for extenuating circumstances)
If it was a Ch 13...
â€¢ You can be still *in* a Ch 13 BK with FHA or VA financing, it is just required that:
- one year of the pay-out period under the bankruptcy has elapsed
- the borrower's payment performance has been satisfactory and all required payments have been made on time, and
- the borrower has received written permission from bankruptcy court to enter into the mortgage transaction.
â€¢ If it was a dismissed BK then 2 years from the dismissal date for FHA or VA financing
â€¢ USDA requires 3-years BK discharge (only 1 year for extenuating circumstances - however there are lenders who will use the Ch 13 BK filing date for this seasoning requirement - each USDA lender has a slightly different take)
â€¢ Fannie Mae & Freddie Mac require 2 years from discharge date & 4 years from dismissal date (2 years from dismissal with extenuating circumstances)
If it was a Foreclosure (including a mortgage included in BK)...
â€¢ FHA & USDA require 3 years from the foreclosure sale date/when the home is no longer legally in your name (only 1 year if it was due to extenuating circumstances)
â€¢ VA requires 2 years from the foreclosure sale date/when the home is no longer legally in your name (only 1 year for extenuating circumstances)
â€¢ Fannie Mae & Freddie Mac require 7 years from the foreclosure sale date/when the home is no longer legally in your name (3 years if it was due to extenuating circumstances, 10% down)
In all situations you need at least 12 months of re-established credit and 3 traditional trade lines, some lenders want 3 trade lines of 12 months each. Trade lines that survived a BK, such as a credit card you kept open, a car loan you maintained payments on/didn't include, student loans that you are making payments on that couldn't be included, etc. can count towards the re-established credit.
Other than medical collections that can be properly explained, if there are any late payments or delinquent accounts (collections, charge-offs, judgments, tax liens) after the BK or foreclosure then the time seasoning often starts over again from the latest late payment/delinquent mark (underwriter's discretion).
Having a verifiable on time housing payment history goes a long way to making an underwriter feel comfortable, as well as taking a pre-purchase housing counseling class with a budgeting/financial module. Practically anything you can do to prove that you have made & kept a vow to make all payments on time will be helpful.
Shane Milne | Lending in all 50 states | NMLS #81195