North Coast Financial in California would consider this type of scenario: http://www.northcoastfinancialinc.com
See my answer to Stephen. The professioal Trustee we use is located in Midpines, Ca and has done over 5000 Trusts that I'm aware of. It is all creative owner financing-which fully protects both the owner and the tenant in ways no one else seems to have dreamed of. We only need for the tenant to have a responsible paying job.
If the tenant needs to leave-we just find a place [in the USA] where he needs to go, and set up a Trust there. Then there are new commissions, or consulting fees, from the new tenant-but we use the old Trust for the owner, until the tenant sets up a take out loan.
I liked your answer-suggesting a lease program with option to buy. I am a member of Bill Gatton's living revocable Trust application. The buyer assigns the property to a licensed, bonded, Trustee who after setting up the Trust [with my help] sets up a rental agreement with a tenant who then can write off all of his rental payment [except insurance and principal payment] Because of this arrangement the tenant makes quite a savings on taxes and therefore can pay more in rent than is normally asked. Eviction is easy.
The rental can be advertised as a Rent To Own. There is no major down payment, and no credit is needed-new bankruptcy,foreclosure, IRS liens have no effect. You'll find at least 55 of these transactions in Riverside alone. My RE Broker friend and I can meet most anytime-if you wish further explanation. There are commission allowances
Most California Short Sales and foreclosures-and underwater properties--have debt forgiveness. Any "refi" that was not directly used to improve the property, and which property eventually sold for less than what is owed, in total, unfortunately is still taxable under the IRS Regulations.
Pamphlet 4681 does include a number of exclusions- insolvancy at the time of foreclosure etc. Those regulations are to be followed as outlined near the bottom part of 4681, and include precise examples of what one must do. I'd love to be proven wrong, but I think we all should be aware of the problem facing our society. I have written a paper on this subject for an RE Broker friend of mine and would be obliged to send it to anyone Julia will release an email address to.
Regarding the IRS, Needahome is asking as a buyer, so this wouldn't apply to him.
Second, the IRS Mortgage Forgiveness Debt Relief Act of 2007 applies to sellers and foreclosures. Rather than explain this, and risk getting it wrong, I've attached a link to the IRS explanation. It applies through 2012 so I suspect Needahome was covered with his foreclosure last year.
I can provide a plan to buy any RE with only a contingency fund down-no credit required-and little cash-only a little more than any rental agreement. If the IRS levies on one they cannot levy on your property-your home.
-VA - 2 yrs
-FHA - 3 yrs
-Conventional - 7 yrs
These dates are from the date the deed to the property transferred out of your name.
However you could try to find a private money source. You would need at least 35% down and the rates would be much higher than a standard loan. But you could refi to FHA once you pass the 3 year waiting period. But there is a risk you will not know what interest rates will be in 2 years.
Unfortunately, with tightened lending practices these days, it know that with a foreclosure or bankruptcy, it's usually around 3 years before you can get back in a home. Speak with a lender though, depending on your credit and the lender, they may be able to qualify you.
Do you know the actual date of the foreclosure? (the Trustee sale date) Is it the same date that is reporting on your credit report by the lender? I have found that the lender will not report the foreclosure on credit for 3-12 months AFTER the home actually transferred title via auction. This can delay your ability to purchase sooner if not reported correctly.
There are no secret government insured low down payment loans that allow you to purchase one year after a foreclosure with a 620 score. FHA has a 3 year waiting period, or even after 12-24 months if you have an acceptable extenuating circumstance. VA has a two waiting period, and USDA 100% financing has a 3 year waiting period also with the possibility to approve sooner with extenuating circumstances.
if you have a boat load of cash for a 30% down payment, like Jennifer Ready mentioned, you might be able to get private financing and purchase now.
Is it possible that the brainiacs who make the rules for underwriting guidelines will reduce this waiting period and enable you to purchase sooner with a low down payment loan? maybe...maybe not. If you want to be contacted ASAP if something does change, call me and I will contact you if anything changes.
When it it time to buy, make sure you have established credit, can verify on time rent payment for 12-24 months via cleared checks.
Possible... maybe but not with conventional financing. Generally after a foreclosure conventional financing is not available for 5 years. Lenders want you to get fully re-established and demonstrate a good history to avoid having the same thing happen again.
Possible options could be owner financing, hard money loans, lease options, just to name a few. In each of these situations you'll need a good explanation, large down payment and/or a willing and able seller.