length of time for qualifing for a home loan after a deed in lieu

Asked by Larry, Atlanta, GA Mon Mar 12, 2012

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Breonnabeo, Home Buyer, Summerville, SC
Fri Aug 21, 2015
Fannie Mae waiting period after a deed in lieu of foreclosure or short sale guidelines will allow a mortgage loan borrower to qualify for a mortgage loan after 2 years from the date of the deed in lieu of foreclosure or a short sale if and only if, the borrower has a 20% down payment. http://ForeclosureIQ.com
2 votes
Fannie Mae has changed the waiting period after deed in lieu of foreclosure and/or short sale to a four year waiting period from the recorded date of the deed in lieu or four years from the date of the short sale. The two year waiting period with 20% down payment no longer applies. Here is the link where it states the changes of Fannie Mae waiting period to qualify for conventional loan after deed in lieu and/or short sale http://gustancho.com/2016-fnma-guidelines-changes . The great news is that a Conventional Loan buyer no longer need 20% down payment. You can qualify for a 5% down payment Conventional Loan four years after bankruptcy, deed in lieu or short sale.
Flag Sun Jul 31, 2016
Richard- El…, Other Pro, Augusta, GA
Thu Jun 20, 2013
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1 vote
Richard
My name is Allen I saw your answer and I have a question. I was discharged in I believe March of 2016. Found out earlier this year that my loan was never reaffirmed so I took my Bankrupcy lawyers advice and stopped paying since I want to move. I know there is a 2 year waiting period after a Chapter 7. Recently they have started the process for a sheriff 's sale / foreclosure. I have a letter from Wells Fargo where they said no payment on time or late nor will a foreclosure show up on my credit report. So now I'm wondering if they won't post it do I have to wait longer than the 2 years after my discharge to refinance ?
I live in Indiana so I'm not sure if that matters.
Flag Sat Aug 12, 2017
20% down hard money for how long? I need it for at 3 years. Is this possible?
Flag Sun Oct 27, 2013
Terri Club, , Arizona
Tue Apr 23, 2013
I had a client who wanted to buy a home in Arizona, but he had a foreclosure. After researching the web I found a loan program at http://www.cfsflex.com, they allow a mortgage after a foreclosure, short sale or deed in lieu. There is no waiting period. Good to see lending options coming back.

Visit http://www.cfsflex.com for more details.
1 vote
Maria Cipoll…, Agent, Coral Springs, FL
Thu Jun 20, 2013
I have customers that got the loan after a year. Shop around for a mortgage broker than can review all your financial documents, credit report and can advice you properly.

Best of Luck,

Maria Cipollone

http://www.Flahomespecialist.com
0 votes
Gustan Cho, Mortgage Broker Or Lender, Lombard, IL
Sun Jan 27, 2013
Both my wife and I had financial problems in 2008 because we had a big mortgage and my wife was laid off. Due to that, our credit suffered greatly and we went into default with our mortgage. I had credit collectors calling me non stop, even at work. I am employed by a government agency and am out on the field most of the time and these credit collectors were constantly calling my superiors and leaving nasty messages that I was contemplating filing bankruptcy. My house went into foreclosure and my wife and I went into a rental. It was very difficult to have a management company to accept us due to our credit so we ended up renting a mobile home from an elderly lady. Last year we started to look for homes and found one we liked. I called a mortgage company and applied for a loan and was rejected because they told me my 3 year waiting period is not up. I told my wife that we had to wait another year. Then, my realtor called me and told me to contact Gustan Cho. Gustan Cho is a mortgage broker who has offices in Florida and Illinois. My realtor, Scott Johnson from Remax told me that Gustan Cho has helped people with really bad credit get loans and Gustan Cho just got a loan for one of his associates clients in Financing a Condotel in Hollywood, Florida. Scott told me that no lender in this country finances condo hotel loans and was really surprised that Gustan Cho was able to do so for his associates Hollywood, Florida condotel.

Skeptically, I contacted Gustan Cho through his website, GustanCho.com and spoke to him. The first thing he wanted was the paperwork by the county stating when the sheriff sale was or when the deed was transferred to the lender. That was no problem because my other loan officer, Mike, asked the same thing. I emailed Gustan Cho what he requested and he told me that I was in luck. I did not believe Gustan Cho at first but he swore to me that the foreclosure was a non issue but I still needed to qualify for the mortgage. Gustan Cho told me to go to GustanCho.com and apply online. My wife, Kate and I applied online and filled out the application. Within an hour or so after we submitted our application, Gustan Cho contacted Kate and told her we were preapproved and told us what the rate and term was for a $250,000 FHA loan. He then sent us our application to sign and we submitted all of our documents along with a real estate contract. We closed on our home exactly one month after submitting all of the documents to Gustan Cho. It has been almost a year since we are proud homeowners thanks to Gustan Cho.

Why did Gustan Cho get us a home loan when the other mortgage broker could not? The first mortgage broker was incompetent. Mike, the other broker (I will not use his last name or mortgage company because I think he was a newer loan officer and do not want to slander the kid or his company) did not read the foreclosure certificate correctly. The certificate drafted by the Broward County Circuit Court Clerk had two dates. One date was the date of the certificate of title and the other date, dated one year later, was the date of when my foreclosed loan was sold to Fannie Mae. Mike used the date the loan was sold to Fannie Mae and not the date of the certificate of title. Bottom line is that you as a borrower need to check with a competent loan officer like Gustan Cho. For us, it was a case of bad luck but got lucky because of our realtor Scott.
0 votes
, ,
Tue Mar 13, 2012
Summing up what Robert stated from an excerpt referenced:

Waiting Period to Buy After Foreclosure:

Buying After a Foreclosure
The waiting period is 5 years up to 7 years.

Buying After a Foreclosure With Extenuating Circumstances
The waiting period is 3 years up to 7 years.

Buying After After a Deed-in-Lieu of Foreclosure
The waiting period is 4 years up to 7 years.

Buying After a Deed-in-Lieu of Foreclosure With Extenuating Circumstances (death in family of income earner/job transfer beyond your control/ illness/ accident resulting in serious injury)
The waiting period is 2 years up to 7 years.

Buying After a Short Sale
The waiting period is 2 years. However, if a seller does not have a 60-day late pay, Fannie Mae says that seller may immediately buy another home but none of the major lenders will fund such a loan, so it's kind of a fallacy. FHA has similar guidelines but, again, major lenders are not stepping up to the plate. I have heard of isolated instances in which a seller relocated for a job transfer and moved more than a certain distance to qualify to immediately buy a home after a short sale.

However, to answer your particular question, if you have no extenuating circumstances, you will need to wait four years from the date of completion, meaning the date your deed-in-lieu of foreclosure was recorded.

In addition to the waiting period, some loans require 10% down and a minimum FICO score. The home you purchase must be your principal place of residence, not a rental nor a vacation home.
0 votes
Robert Robbi…, , Atlanta, GA
Mon Mar 12, 2012
There is one difficult Item to discover on your Deed-in-Lieu is the date in which the bank either sold the property or the day when they decided to take the home back on their books. No Banks or lenders use your BK date or the time you volunteered the home back as the start date. You must find out what date the home sold or went back on their books. I have seen Months and Years difference between these dates.

The break down is as follows:

Conventional loans require 2 years and 20% down payment from the return date.
4 years with a 10% down payment from the return date.
over 7 years to get a 5% down Payment

FHA requires 3 years from the return date (2 years under special circumstances)

Last week I had a customer call me because his BK was almost 4 years old. The problem was the bankers not take back the house until 2010. So unless he was ready to put 20% down he was going to have to wait another year.

I hope this has been helpful.
Best of Luck!

Rob

Robert Robbins
Cornerstone Mortgage Group, LLC
678-578-7613
404-932-5353
Robbins@cmghl.com
0 votes
, ,
Mon Mar 12, 2012
The length of time depends on the loan program. For a conventional mortgage, Fannie Mae requires at least 2 years with a 20% down payment.

HUD requires a 36 month waiting period for an FHA mortgage. With an FHA mortgage, a Deed in Lieu is treated the same as a foreclosure.

Regards,
Rodney Mason, NMLS #151088
Sr Loan Officer
Prospect Mortgage
825 Juniper St NE, Atlanta, GA 30308
Office: (404) 591-2453
rodney.mason@prospectmtg.com
Apply Online at http://www.rodneymason.com
Licensed in Alabama & Georgia

Prospect Mortgage offers a full selection of mortgage programs including:
Conventional | FHA | FHA 580-639 FICO | FHA 203K Renovation (Streamline & Consultant) | HomePath® | HomePath® Renovation | HomeStyle Renovation | VA | USDA | GA Dream | Jumbo Financing
Web Reference:  http://www.rodneymason.com
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