Can you obtain a loan after a forclosure?

Asked by Shugahmama3, Hayward, CA Wed Dec 28, 2011

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Elise Groves, Mortgage Broker Or Lender, Santa Rosa, CA
Thu Dec 29, 2011
Robert, good to know about the VA guidelines. My investor overlays must be the reason I am being told 3 years.
0 votes
Robert Chome…, , San Diego, CA
Thu Dec 29, 2011
Good answers below, but VA is only a 2 yr wait after foreclosure not 3 yrs. You do not need extenuating circumstances to get a VA loan 2 yrs after a foreclosure.

And a word about extenuating circumstances...it has to be something major and fully documented. It is very rare that an loan underwriter will approve an exception to not wait the full period after foreclosure. It can't be that you lost your job and got into financial difficulties. It has to be something like a documented major illness or a forced job transfer out of area.
Web Reference:  http://www.socalvaloans.com
0 votes
Elise Groves, Mortgage Broker Or Lender, Santa Rosa, CA
Wed Dec 28, 2011
HI - depending on what type of financing you are looking for, here are the current rules after a foreclosure:
1. Conventional financing - 7 years if no extenuating circumstances, but only 3 years and a 10% down payment if deemed extenuating circumstances.
2. FHA - 3 years. If less than 3 years, but more than 12 months, it might be okay with extenuating circumstances.
3. VA - 3 years. Or 12-23 months if credit re-established and paid as agreed, and caused by extenuating circumstances.
4. USDA- 3 years. Or less than 3 years with acceptable extenuating circumstances.

Extenuating is defined as a non-recurring event that is beyond the borrowers control that results in a sudden, significant and prolonged reduction in income, such as a serious illness or death of a wage earner. Divorce is not viewed as acceptable, however alot of serious medical conditions are.

I hope that helps and clears things up.
Happy Holidays!
Web Reference:  http://www.GrovesTeam.net
0 votes
Edith Karoli…, Agent, Winnetka, IL
Wed Dec 28, 2011
You pretty much got your answer below, once you go through foreclosure your credit standing will be low and your are considered a large risk and the time frame of 3 - 5 years is probably right..... now all that said means you will need a loan, that;s why you were not able to pay your mortgage before.... If of course you have cash (?) then you can buy full price cash without a lender....

Yes the other agent is right, make sure your credit score comes up over the years....
Even for renting they will want your credit and back ground check these days....

Be very careful and explore all your options carefully with the right and experienced professionals.
Good Luck to you
Edith YourRealtor4Life!
0 votes
Ashley Mitch…, Agent, Sacramento, CA
Wed Dec 28, 2011
After a foreclosure you can expect your credit score to drop into the 500's and will not be able to obtain a purchase loan for 3 to 5 years (depending on the circumstances) during which time you should be working diligently on improving your credit. -Ashley Mitchell
Web Reference:  http://AcgRealtyGroup.com
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