Home Buying in Menifee>Question Details

Needahome, Renter in Menifee, CA

I foreclosed on a home last year and I am renting a home now.I was wondering if it is possible for me to buy a home with a down payment?

Asked by Needahome, Menifee, CA Mon Aug 29, 2011

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Your best bet would be to call a trusted lender in your community but from what I understand the waiting periods are 2 yrs VA, 3 yrs FHA and 7 yrs Conventional.

http://www.blancadover.com
Web Reference: http://www.blancadover.com
1 vote Thank Flag Link Tue Feb 21, 2012
If you have a down payment of 25%+ you can still get a hard money loan even with a recent foreclosure. It is more difficult to get an owner occupied hard money loan but there are lenders who will do it.

North Coast Financial in California would consider this type of scenario: http://www.northcoastfinancialinc.com
0 votes Thank Flag Link Thu Jun 25, 2015
You would still be able to purchase a home with a hard money loan. It will be very difficult to get a conventional loan with a recent foreclosure. Foreclosures can be overlooked by a hard money lender as long as the borrower has a down payment of at least 25% and meets a income requirement (income requirement is regulation imposed by government for owner occupied properties).
0 votes Thank Flag Link Fri May 8, 2015
Dan
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.
0 votes Thank Flag Link Mon Feb 20, 2012
Stephen
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
0 votes Thank Flag Link Mon Feb 20, 2012
I do appreciate your answer as I see this debt forgiveness tax as a bigger issue than such problems as credit scores and deficiency judgments. Unfortunately you--and I suspect most others, see the 2007 Act as a cure all. Further reading, of what you have included, is in 4681 and merely masks the problem. The Act of 2007 only applies to what we Californians refer to as "purchase money deeds"--the original loan amount.

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.
0 votes Thank Flag Link Mon Feb 20, 2012
Jack,
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.
0 votes Thank Flag Link Mon Feb 20, 2012
I am new to this site, and I'm not an Agent. I have been involved in distress property since 1973 when I attended my first foreclosure workshop. Over the years I have been involved in buying over 200 distress properties, having been a Trustee selling at the Court House steps, to appraising property for resale by HUD. Right now, I'm very concerned by the lack of professional attention paid to the IRS Pamphlet #4681 that defines the issuance of the 1099's by the lender where any debt forgiveness of more than $500 has taken place.

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.
0 votes Thank Flag Link Mon Feb 20, 2012
there is plenty of creative owner financing deals out there
0 votes Thank Flag Link Mon Feb 20, 2012
Waiting periods to buy after foreclosure:
-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.
0 votes Thank Flag Link Sun Feb 19, 2012
As we say in football, work on the ground game first. Get to a lender. See what they say. Also connect wth a Realtoor. Be honest with both. You might be surprised what you can do. There is some "Owner Financing" out there, as well. You have to ask about it, though. I arranged 2 of those recently.
0 votes Thank Flag Link Sun Feb 19, 2012
Needahome,
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.

John
0 votes Thank Flag Link Fri Feb 17, 2012
Hi NeedaHome,

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.
Web Reference: http://homeloanartist.com
0 votes Thank Flag Link Tue Aug 30, 2011
I'd suggest a lease option to buy. With the right terms of course. But before you do anything, you need to sit down with a mortgage broker and figure out how long it will take to repair your credit.
0 votes Thank Flag Link Tue Aug 30, 2011
Hi NeedAHome, A good place to start would be to contact a lender. He or she can help get you in the right direction. Good Luck to you, Jodi Bettarel
0 votes Thank Flag Link Mon Aug 29, 2011
You will need to have 30% and then you can go for a hard money loan if you want to buy in the next few years.
0 votes Thank Flag Link Mon Aug 29, 2011
Needahome,
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.
0 votes Thank Flag Link Mon Aug 29, 2011
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