Lender checking in: Please read below regarding the waiting periods for short sales and foreclosures. In short, that 580 credit score needs to be a 620 for for FHA. Take a look at your credit report and see if your balance/available balance is over 50% and that could be skewing your marks. Otherwise..let the lates go behind you. Whatever you do, do NOT attempt to have those late payments on the mortgage be repaired. Let the 'Last Activity' get older and older lest you have to wait another 3 years from the time of the late event.
FHA: 2 years if your foreclosure is due to â€˜extenuating circumstancesâ€™. This would be serious illness or death of wage earner. Divorce or job transfer is not considered â€˜extenuatingâ€™. Otherwise, 3 years from date of transfer back to the lender.
VA: 2 years from date transferred back to lender. 12-23 months if credit is reestablished and foreclosure was due to â€˜extenuating circumstanceâ€™. This would be unemployment, prolonged strike, medical bills not covered by insurance. Divorce is not considered extenuating.
Conventional: 3 years with â€˜extenuating circumstancesâ€™ and 10% down payment. Extenuating circumstance would be any non-recurring event that was beyond the borrowerâ€™s control that resulted in a sudden significant and prolonged reduction in income or catastrophic increase in financial obligations. Otherwise 7 years.
USDA: Less than 3 years with â€˜extenuating circumstanceâ€™ loss of job, delay or reduction in government benefits or other loss of income, increased expenses due to illness, death, etc. Otherwise 3 years.