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scoopearth1 · 2 months

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FHA Bad Credit Lenders: Your Path to Homeownership Despite Bad Credit

Navigating the housing market can be daunting, especially for individuals with less-than-perfect credit. Traditional lenders often set high credit score requirements, making it challenging for many prospective homebuyers to secure a mortgage. However, FHA Bad Credit Lenders specialize in helping those with bad credit, offering a lifeline to homeownership. With the ability to assist borrowers with credit scores as low as 500 FICO, those in Chapter 13 bankruptcy repayment plans, and those requiring manual underwriting, FHA Bad Credit Lenders stand out in an industry that frequently says “no.”

Understanding FHA Loans

FHA loans, backed by the Federal Housing Administration, are designed to make homeownership more accessible, especially for those with lower credit scores. These loans come with more lenient credit requirements and lower down payment options compared to conventional loans. FHA loans are particularly beneficial for first-time homebuyers and those with financial difficulties in their past.

FHA Loans for Bad Credit

Bad credit can seem like an insurmountable barrier to homeownership. However, FHA Bad Credit Lenders have a unique approach that makes it possible for borrowers with low credit scores to qualify for an FHA loan. FHA Loans For Bad Credit While many lenders require a minimum credit score of 620 or higher, FHA Bad Credit Lenders can work with individuals with credit scores as low as 500.

Key Benefits:

Lower Credit Score Requirements: FHA Bad Credit Lenders can approve loans for individuals with credit scores down to 500.

Low Down Payments: FHA loans typically require as little as 3.5% down, making it easier for buyers to afford a home.

Flexible Underwriting: Manual underwriting allows lenders to consider the full picture of a borrower’s financial situation, not just their credit score.

FHA Chapter 13 Bankruptcy

Many people believe that filing for bankruptcy disqualifies them from obtaining a mortgage for several years. However, FHA Bad Credit Lenders can assist borrowers currently in a Chapter 13 bankruptcy repayment plan. FHA Chapter 13 bankruptcy involves a court-approved repayment plan that allows borrowers to pay off their debts over a three to five-year period.

How It Works:

Court Approval: Borrowers must have made timely payments for at least 12 months and obtain court approval to take on new debt.

Manual Underwriting: Lenders will manually underwrite the loan, considering factors such as payment history and financial stability.

Loan Terms: Borrowers in a Chapter 13 plan can secure an FHA loan with favorable terms, providing an opportunity to rebuild credit and achieve homeownership.

FHA Manual Underwriting

Manual underwriting is a process where lenders evaluate a borrower’s application without relying solely on automated systems. This approach is especially beneficial for individuals with bad credit or unique financial situations that do not fit the standard criteria.

Benefits of Manual Underwriting:

Personalized Evaluation: Lenders assess the full financial picture, including income, employment history, and payment patterns.

Flexibility: Manual underwriting allows for greater flexibility in approving loans for borrowers who may not meet automated underwriting standards.

Opportunity for Approval: Borrowers with compensating factors, such as a stable job or a large down payment, have a higher chance of loan approval.

FHA Jumbo Loan

FHA Jumbo Loans are designed for borrowers looking to purchase high-value properties that exceed the standard FHA loan limits. These loans offer the same benefits as regular FHA loans but cater to borrowers in high-cost areas or those seeking larger homes.

Key Features:

Higher Loan Limits: FHA Jumbo Loans provide higher loan limits, making it possible to finance more expensive properties.

Bad Credit Options: Borrowers with bad credit can still qualify for FHA Jumbo Loans, benefiting from the same lenient credit requirements.

Competitive Interest Rates: Despite the larger loan amount, FHA Jumbo Loans often come with competitive interest rates.

FHA Bad Credit Lenders: Not Just Lead Generation

FHA Bad Credit Lenders distinguish themselves from other companies by being actual lenders, not merely lead generation services. This means they have a direct hand in approving loans and can offer personalized assistance throughout the lending process.

Advantages:

Direct Lending: As direct lenders, they can streamline the approval process and provide quicker responses.

Specialized Assistance: They have extensive experience working with borrowers who have been denied by other lenders, offering tailored solutions to meet unique needs.

Comprehensive Support: From pre-qualification to closing, FHA Bad Credit Lenders provide support at every step, ensuring a smooth and informed lending experience.

Getting Pre-Qualified

Pre-qualification is an essential first step in the home-buying process, especially for those with bad credit. FHA Bad Credit Lenders offer a straightforward pre-qualification process, providing potential buyers with a clear understanding of their borrowing capacity and loan options.

Steps to Pre-Qualification:

Contact: Reach out to FHA Bad Credit Lenders 7 days a week to start the pre-qualification process.

Provide Information: Share your financial details, including income, employment history, and credit information.

Receive Pre-Qualification: Based on the information provided, receive a pre-qualification letter outlining your loan options and potential terms.

Conclusion

Homeownership is within reach, even for those with bad credit, thanks to FHA Bad Credit Lenders. By offering FHA loans to borrowers with credit scores as low as 500, assisting those in Chapter 13 bankruptcy repayment plans, and providing manual underwriting and jumbo loan options, they open doors that other lenders close. With their commitment to saying “approved” when others say “denied,” FHA Bad Credit Lenders stand as a beacon of hope for aspiring homeowners. Contact them today to get pre-qualified and take the first step towards owning your home.

#loans

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brianwilder · 2 months

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Understanding the FHA Bankruptcy Waiting Period

Navigating the world of home loans can be particularly challenging if you've recently filed for bankruptcy. If you're thinking about an FHA loan, it's crucial to understand the FHA bankruptcy waiting period and how it impacts your eligibility. This comprehensive guide covers everything you need to know, answering key questions to help you along the way.

What Is an FHA Loan and How Does It Work?

An FHA loan is a mortgage insured by the Federal Housing Administration (FHA). These loans are designed to assist individuals who may not qualify for conventional mortgages, including first-time homebuyers, borrowers with lower credit scores, and those with adverse credit events such as bankruptcies. FHA loans typically feature lower down payments and more lenient credit requirements compared to conventional loans, making them an appealing option for many borrowers.

Benefits of an FHA Loan

Lower Down Payment Requirements: FHA loans allow down payments as low as 3.5%, making homeownership more accessible.

Flexible Credit Score Requirements: FHA loans are particularly accommodating for borrowers with lower credit scores or past bankruptcies.

Low Interest Rates: FHA interest rates are generally lower than those of conventional loans, such as those offered by Fannie Mae.

Cash-Out Refinances: FHA loans allow for cash-out refinances up to 80% loan-to-value, providing flexibility for homeowners needing access to cash.

A Note on Mortgage Insurance: While FHA loans require both upfront and monthly mortgage insurance, it's worth noting that conventional loans also require mortgage insurance when the down payment or equity is less than 20%. Mortgage insurance protects lenders in case a borrower defaults on their loan.

How Does Bankruptcy Affect Your FHA Loan Eligibility?

Bankruptcy can have a considerable impact on your credit history and financing options, but it doesn’t mean you’re permanently ineligible for an FHA loan. Understanding the waiting periods and specific requirements tied to different types of bankruptcy is crucial for determining your eligibility for an FHA loan, whether you're looking to refinance or purchase a home.

Chapter 7 Bankruptcy

For Chapter 7 bankruptcy, you generally need to wait at least two years from the discharge date before qualifying for an FHA loan. This waiting period is designed to give you time to rebuild your credit and show improved financial stability. During this time, you'll need to:

Rebuild Your Credit: Re-establish a good credit history and provide a satisfactory explanation for the bankruptcy.

Demonstrate Financial Stability: Show that you have managed your finances responsibly since the bankruptcy discharge.

Chapter 13 Bankruptcy

If you’re in a Chapter 13 repayment plan, you may qualify for an FHA loan under specific conditions:

While in Repayment Plan: You can apply for an FHA loan if you’ve made timely payments for at least one year and have received court approval.

After Discharge: There’s typically a 12-month waiting period post-discharge before you can apply for an FHA loan.

Consistent, timely payments during the repayment period are crucial to demonstrate financial responsibility.

FHA Chapter 7 Bankruptcy Waiting Period

The waiting period for an FHA loan following Chapter 7 bankruptcy is generally two years from the discharge date. This allows you time to rebuild your credit and demonstrate improved financial stability. Here's how to use this period effectively:

Rebuilding Credit: Key Steps to Improve Your Score

Obtain Secured Credit Cards: Secured credit cards require a cash deposit as collateral, which typically becomes your credit limit. Use these cards for small purchases and pay off the balance in full each month. This will help rebuild your credit score over time.

Pay Bills on Time: Consistently paying all bills, including utilities and rent, is crucial. Timely payments are the largest factor in your credit score, so set up automatic payments or reminders to avoid missing due dates.

Monitor Your Credit Report: Regularly check your credit report for errors or inaccuracies. You’re entitled to a free credit report from each major bureau (Experian, TransUnion, and Equifax) once a year. Dispute any incorrect information to ensure your report accurately reflects your financial behavior.

Keep Credit Utilization Low: Aim to keep your credit utilization ratio below 30%. This ratio is the percentage of your credit card balances relative to your credit limits. High credit utilization can negatively impact your score, while a lack of utilization can also be detrimental.

Avoid Opening Too Many Credit Accounts: While having at least three credit accounts is beneficial, opening too many accounts in a short period can lower your credit score due to hard inquiries. Focus on managing your existing accounts before considering new credit.

Saving for a Down Payment: Why It Matters

Even though FHA loans require a lower down payment, saving more can enhance your loan application and provide several benefits:

Strengthen Your Loan Application: A larger down payment reduces the lender’s risk and demonstrates financial discipline, which can be especially important after bankruptcy.

Lower Monthly Payments: A bigger down payment reduces the amount you need to borrow, lowering your monthly mortgage payments and making homeownership more affordable.

Better Loan Terms: While less of a factor with FHA loans, a substantial down payment might help you negotiate better terms, such as a lower interest rate.

Emergency Fund: Extra savings not only aid with the down payment but also provide a safety net for unexpected expenses, helping you avoid future financial difficulties.

What Is the FHA Chapter 13 Bankruptcy Waiting Period?

If you've filed for Chapter 13 bankruptcy, the waiting period to qualify for an FHA loan differs from that of Chapter 7. Here’s a breakdown of what you need to know to prepare for your FHA loan application after a Chapter 13 bankruptcy:

While in the Chapter 13 Repayment Plan

Eligibility: You may qualify for an FHA loan while still in the Chapter 13 repayment plan if you meet specific criteria.

Timely Payments: You must have made at least 12 months of timely payments to the bankruptcy trustee and/or creditors.

Court Approval: You need to obtain written approval from the bankruptcy court. This approval indicates that the court believes you can handle new debt without jeopardizing your repayment plan.

After Chapter 13 Discharge

12-Month Waiting Period: Once your Chapter 13 bankruptcy is discharged, there is typically a 12-month waiting period before you can apply for an FHA loan.

Maintaining Stability: During this period, continue to manage your finances responsibly. Ensure timely payments on all remaining debts and avoid any new derogatory marks on your credit report.

Document Financial Improvement: Be prepared to provide documentation of your financial history and improvements since your bankruptcy discharge. This includes your credit report, proof of income, and a letter explaining your bankruptcy and the steps you've taken to improve your financial situation.

Understanding these timelines and requirements will help you navigate the FHA loan process more effectively and increase your chances of securing financing for your future home.

During the Repayment Plan: Can I Qualify for an FHA Loan?

Yes, it's possible to qualify for an FHA loan while you're still in a Chapter 13 repayment plan, but there are specific conditions you need to meet. Here’s what you need to know:

Timely Payments

Requirement: You must have made at least 12 months of timely payments to the bankruptcy trustee and/or creditors as specified in your Chapter 13 repayment plan.

Purpose: This shows lenders that you have successfully managed your financial obligations and regained financial stability.

Court Approval

Obtain Approval: You’ll need written approval from the bankruptcy court to proceed with an FHA loan application.

Reason: This approval confirms that the court has reviewed your financial situation and agrees that you can handle new debt without disrupting your repayment plan.

Conditions: The court’s permission is often based on your ability to continue making Chapter 13 payments while managing a new mortgage.

Documenting Your Financial Responsibility

Payment Documentation: Prepare to provide detailed records of your payment history during the Chapter 13 plan. This includes receipts or statements showing consistent, on-time payments.

Explanation Letter: Write a letter explaining the circumstances of your bankruptcy and how your financial situation has improved. This letter helps lenders understand your financial journey and the steps you’ve taken to improve your creditworthiness.

Assistance

Seek Expert Help: Work with a lender who has experience handling bankruptcies. An experienced lender can guide you through the process, answer your questions, and help ensure that you meet all the necessary requirements for your FHA loan application.

By following these steps and meeting the requirements, you can navigate the FHA loan process more effectively while still in a Chapter 13 repayment plan.

After Discharge: What Are the Next Steps?

Once you've successfully completed your Chapter 13 repayment plan and received your discharge, you're looking at a 12-month waiting period before you can apply for an FHA loan. Here’s what you need to focus on during this time:

12-Month Waiting Period

Start Date: The waiting period begins from the date of your Chapter 13 discharge.

Purpose: This period is designed to help you further stabilize your financial situation and continue rebuilding your credit profile.

Maintaining Financial Stability

Timely Payments: Continue to make timely payments on all your remaining debts and obligations. Maintaining a clean payment history is crucial.

Avoid Negative Marks: Steer clear of late payments or any new derogatory marks on your credit report, as these can impact your FHA loan application.

Saving for a Down Payment

Importance: While FHA loans require a down payment as low as 3.5% (for those with credit scores of 580 or higher), saving more can strengthen your application.

Benefits: A larger down payment not only improves your attractiveness as a borrower but can also lower your monthly mortgage payments and potentially secure better loan terms.

Documentation and Proof of Financial Improvement

Prepare Documentation: Gather comprehensive documentation of your financial history and improvements since your bankruptcy discharge. This should include:

Credit report

Proof of income

Employment history

Any other relevant financial documents

Explanation Letter: Write a letter explaining your bankruptcy and how your financial situation has improved since then. This can help lenders understand your financial journey better.

Consultation with a Mortgage Professional

Seek Expertise: Engage with a mortgage professional who has experience handling cases involving bankruptcy. They can provide valuable guidance and help you navigate the FHA loan application process effectively.

By focusing on these steps, you'll be better prepared to apply for an FHA loan once the waiting period has elapsed, and you’ll be on your way to achieving your homeownership goals.

How Can I Improve My Chances of Getting an FHA Loan After Bankruptcy?

Improving your chances of securing an FHA loan after bankruptcy involves several key steps. Here’s how you can enhance your application:

Build a Positive Credit History

Make On-Time Payments: Ensure all your current debts and bills are paid on time. Payment history is a significant factor in your credit score.

Keep Credit Utilization Low: Maintain a low ratio of credit card balances to credit limits, ideally below 30%.

Avoid New High-Interest Debt: Be cautious about taking on new debt, especially high-interest loans, which can negatively impact your credit profile.

Save for a Down Payment

Increase Your Down Payment: Although FHA loans have a lower down payment requirement, saving more can strengthen your application. A larger down payment not only demonstrates financial responsibility but can also help reduce your monthly mortgage payments.

Provide a Detailed Explanation

Explain Your Bankruptcy: Prepare a clear, honest explanation of the circumstances that led to your bankruptcy and how your financial situation has improved since then. This explanation can help lenders understand your financial journey and assess your current stability.

Obtain Court Approval (For Chapter 13 Applicants)

Seek Court Permission: If you are still under a Chapter 13 repayment plan, make sure to obtain written approval from the bankruptcy court. This approval indicates that the court believes you can manage a new mortgage without disrupting your repayment plan.

By following these steps, you’ll be better positioned to navigate the FHA loan process and enhance your chances of approval, paving the way toward your homeownership goals.

What Are the Exceptions to the FHA Bankruptcy Waiting Period?

While FHA guidelines typically adhere to standard waiting periods after bankruptcy, there are exceptions for cases involving extenuating circumstances. If you can prove that your bankruptcy resulted from factors beyond your control, you might be eligible for a waiver. Here are some scenarios that might qualify for an exception:

Significant Income Loss

Criteria: Demonstrate a temporary loss of at least 20% of your income for a minimum of six months.

Evidence: Provide documentation such as unemployment records, income statements, or other proof of reduced earnings.

Medical Emergencies

Criteria: Severe illness or injury that led to substantial financial hardship.

Evidence: Medical records, hospital bills, or other documentation showing the impact of the medical emergency on your finances.

Death of the Primary Earner

Criteria: The death of the main income earner in your household.

Evidence: Death certificate, financial statements showing the impact on household income.

To qualify for an exception, you’ll need to present thorough documentation of these extenuating circumstances and show that you have maintained responsible financial behavior since your bankruptcy discharge.

Frequently Asked Questions

What is the FHA bankruptcy dismissal waiting period?

If your Chapter 13 bankruptcy case is dismissed rather than discharged, you must wait two years before qualifying for an FHA loan. This waiting period provides time to re-establish your credit and demonstrate financial stability.

How Long Does It Take to Get an FHA Loan?

Once you meet the qualifications, securing an FHA loan typically takes 30 to 45 days. Here’s a quick breakdown:

Application and Documentation: 1-2 weeks to submit and review documents.

Loan Processing: 2-3 weeks for verification and appraisal.

Underwriting: 1-2 weeks for final approval.

Closing: About 1 week to sign documents and finalize the loan.

Factors that can affect timing include the lender’s processing speed, the complexity of your financial situation, and any property issues. Staying prompt with your paperwork can help expedite the process.

How to Rebuild Your Credit After Bankruptcy

Get Secured Credit Cards: Apply for one or more secured credit cards and make timely payments to start rebuilding your credit.

Manage Credit Utilization: Keep your credit utilization below 30% and avoid high-interest debt.

Pay Bills on Time: Consistently pay existing debts like rent and utilities to build a positive payment history.

Establish Credit Accounts: Aim to have at least three credit accounts, which can be a mix of credit cards and installment loans.

FHA Loan Requirements for 2024

Credit Score:

580 or higher for a 3.5% down payment.

500–579 for a 10% down payment.

Debt-to-Income Ratio:

Typically under 43%, though exceptions can apply.

Income & Employment:

Proof of steady income and employment is required

Property Use:

The home must be your primary residence.

Yes, the same guidelines apply to both refinances and purchases when it comes to bankruptcies. You can refinance your existing mortgage during and after bankruptcy, following the same rules as for new home purchases.

The Bottom Line

Navigating the FHA bankruptcy waiting period can be complex, but you don’t have to do it alone. At JVM Lending, we specialize in helping borrowers with unique financial situations, including those who have filed for bankruptcy. Our team of experts is dedicated to providing personalized service and guiding you through every step of the loan process. Whether you’re rebuilding your credit, saving for a down payment, or looking to refinance, JVM Lending is here to help.

#FHA bankruptcy waiting period #home loan options #FHA loans #bankruptcy impact #real estate financing #mortgage guidelines #loan approval

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edan-gelt · 2 years

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A bankruptcy to real estate agents is often synonymous with a four-year wait, finding a co-signer or a dead deal.

At Key Mortgage, we have financing options for your buyers in as little as two years post-bankruptcy dismissal or discharge. There are limitations as to the chapter of bankruptcy, loan type, current credit and other factors.

The most common type of bankruptcy is Chapter 7 bankruptcy. This type of bankruptcy wipes away all of the debt and has a severe negative impact on credit. For a typical conventional loan, your client will need to wait at least four years after a court discharge or dismissal for a conventional loan but only two years for an FHA or VA loan. However, under certain extenuating circumstances (i.e. death of a wage-earning spouse) that time for a conventional loan can be cut from four years to two.

A Chapter 13 bankruptcy is not as restrictive as Chapter 7. This type of bankruptcy reorganizes debt instead of wiping it away and requires the consumer to continue to make monthly payments through the court. A borrower can apply for a conventional mortgage two years after the discharge date (vs. four years for a chapter 7). FHA and VA are even more lenient in that they allow a borrower to apply for a mortgage loan only after 12 months of entering into a Chapter 13 repayment plan provided they have made all payments on time and the court approves taking on the new mortgage debt.

For more information about helping your client determine what options are available to them, putting them in the best possible position to buy a new home, reach out to me, Eden Gelt, to be put in contact with a Key Mortgage loan officer.

#edangelt #realestate

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michaelthebroker · 2 years

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If you have gone through bankruptcy, there's no single rule that permanently excludes you from getting a certain type of loan because you've gone through a bankruptcy. As long as you meet the appropriate waiting period. For example, FHA loan waiting periods are shorter than other types of loans.

Chapter 13 bankruptcy allows you to make a fresh start by eliminating your debts, but there's no waiting period at all after your court discharges or dismisses it.

Michael Wolff

U Mortgage-Branch Manager

NMLS #239403

323.646.8367

NC SC CA FL TN SD AK

#michaelthebroker#realestate#raleighnc#raleighrealestate#ncrealestate#homebuyingprocess#firsttimehomebuyers#mortgagepro#raleighNC#homebuying#mortgagespecialist#mortgageadvice#mortgagetip#homeownership#housesunting#firsttimehomebuyers#homeloans#newhome#homebuyingprocess#Bankruptcy

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tornemotions-blog1 · 6 years

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Arizona down Payment Assistance Help!

Key Pieces of Arizona down Payment Assistance

For instance, here in Nevada, the country includes a fund that is giving out up in down payment aid to 35 percent of a house's buy price. The rest of the app fees will always be the same. Additional numerous the loan programs will undoubtedly probably soon be challenging for the New Yorker that is standard to qualify for.

If you imagine a Home Plus mortgage might be appropriate for you , then it is the right time to pick on a lender. Homeowners must fill out an application for the MCC purchasing their home before closure. They'll need to have 5 percent of their purchase price.

Take for higher and you're going to be rewarded for the work. If you should be in need of assistance, go into ask help and the regional Goodwill store. You can also check into government help provided by branches.

In any event could provide aid for first time buyers and it's really a financial incentive that is substantial. First time home buyers represent a population in the usa when attempting to be a homeowner to get the very first time and many can experience trouble. Additionally, when applying for a house grant you're going to be limited as to exactly what and at which it is possible to purchase your property.

There is A residence loan crucial for all housing conditions. Purchasing a home can be nerve wracking, specially if you should be a home-buyer. Buyers need to finish a educational course and have to want to reside in your property.

There are many advantages of investing in san-antonio foreclosures besides the cost tag of the chance and also homes to appreciate savings. The land can not be more expensive than $ 366,000 and has to be located within the city limits. Have a peek at if you wish to get a home refinance with an mortgage, or take equity at house.

There are certainly a great deal of apps to aid homeowners which are in threat of foreclosure and fighting with their mortgage payments. Are not likely to be approved. Many who're turned down for a traditional loan goes to qualify to get a FHA loan.

A mortgage professional can assist you in calculating the mortgage which you're appropriate for. If which you are in danger of foreclosure in your own mortgage and think you are qualified to aid you need to get in touch. As a way to be sure you become qualified to get a house loan following your bankruptcy, ensure you put at 3 to 5 per cent down payment on the home.

There are. First time homebuyer grants can be discovered in distinct forms, and they can be gotten throughout state and the local.

Although, it must be mentioned that grants are for firsttime homebuyers. For entitlement city apps and universities, there's merely a group amount available annually at every degree, in order some instances DPA funds might not be available close to the end of a year. Money is given by this grant program to eligible borrowers that does not want to be repaid.

You will be led by our home counselors through the task. A niche site which will assist you in locating local homebuying programs is provided by HUD.

Here's What I Know About Arizona down Payment Assistance

Detecting a mortgage quotation is wholly free, only requires a couple minutes and will provide you. The purchaser receives something special in the sum of $ 10,000. A person that has always made payments may possess more financing options when compared to a man who have not however it doesn't imply a mortgage is off-limits if you've had credit difficulties.

Maybe there is a grant unavailable in a own nation. You, since the debtor, won't be asked to produce any obligations on the instant. If you 're behind on your payments and can't refinance, that mortgage loan modification may be some thing which may assist you.

At the event that you and your loan servicer can't acknowledge other remedy or a repayment schedule, you might want to investigate filing Chapter 13 bankruptcy. In case a homeowner would love to sell they would likely need to complete it for a reduction. There might also be a choice for things that are negative, where the lender pays afew your closing costs in exchange for a higher rate of interest.

Speaking with a few of those counselors won't supply the certification to satisfy eligibility requirements. Advance payment assistance programs (DPA) are intended to assist you along with your advance payment whilst buying a house. In addition, it can appear in the shape of a debt, a refinancing loan or a grant that must be paid back.

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kentuckybats · 11 months

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How to Qualify For a Kentucky FHA Mortgage Loan

Kentucky FHA Loan Requirements for 2023

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#2021 kentucy fha loan guide #580 credit score loan FHA KY #580 fico score FHA KY #chapter 13 fha mortgage #collections fha mortgage #condo fha kentucky #credit fha loan score #Credit score #difference in usda vs fha in kentucky #FHA #fha $100 down mortgage #fha anti-flipping 90 day waiver policy #fha appraisal requirements #Kentucky #Kentucky Housing Corporation #Loan #Mortgage loan #Refinancing #Zero down home loans

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edan-gelt · 2 years

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Buying A Home After Bankruptcy

A bankruptcy to real estate agents is often synonymous with a four year wait, finding a co-signer or a dead deal. At Key Mortgage, we have financing options for your buyers in as little as two years post-bankruptcy dismissal or discharge. There are limitations as to the chapter of bankruptcy, loan type, current credit and other factors.

The most common type of bankruptcy is Chapter 7 bankruptcy. This type of bankruptcy wipes away all of the debt and has a severe negative impact on credit. For a typical conventional loan, your client will need to wait at least four years after a court discharge or dismissal for a conventional loan but only two years for an FHA or VA loan. However, under certain extenuating circumstances (i.e. death of a wage earning spouse) that time for a conventional loan can be cut from four years to two.

For more information about helping your client determine what options are available to them, putting them in the best possible position to buy a new home, reach out to me, Edan Gelt, to be put in contact with a Key Mortgage loan officer.

#edengelt #edangelt #home #bankruptcy

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melissawalker01 · 4 years

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Lindon Utah Foreclosure Lawyer

Lindon is a city in Utah County, Utah, United States. It is part of the Provo–Orem, Utah Metropolitan Statistical Area. The population was 10,070 at the 2010 census. In July 2018 it was estimated to be to 10,970 by the US Census Bureau. Lindon has an abundant cultural and historical background. Originally settled in 1861, Lindon began as pioneers moved into what was then the Lindon grazing land. The town was originally named “String Town” because of the way the houses were strung up and down the street between the towns of Orem and Pleasant Grove. An old linden tree (Tilia) growing in town in 1901 inspired the present (misspelled) name. Over the past century Lindon has seen organized development, but it has tried to remain true to its motto: “Lindon: a little bit of country”.

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Short Sales vs. Deeds in Lieu of Foreclosure

If you’re having trouble making your mortgage payments and the loan holder (the bank) has denied your request for a repayment plan, forbearance, or loan modification or if you’re not interested in any of those options two other ways to avoid a foreclosure are completing a short sale or a deed in lieu of foreclosure. One benefit to these options is that that you won’t have a foreclosure on your credit history. But your credit score will still take a major hit. A short sale or deed in lieu of foreclosure is almost as bad as a foreclosure when it comes to credit scores. For some people, though, not having the stigma of a foreclosure on their record is worth the effort of working out one of these alternatives.

Short Sales

A short sale occurs when a homeowner sells his or her home to a third party for less than the total debt remaining on the mortgage loan. With a short sale, the bank agrees to accept the proceeds from the sale in exchange for releasing the lien on the property.

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The bank’s loss mitigation department must approve the short sale before the transaction can be completed. (The process of finding a way to avoid foreclosure is called “loss mitigation.”) To get approval for a short sale, the seller (the homeowner) must contact the loan servicer—the company that manages the loan account—to ask for a loss mitigation application. The homeowner then must send the servicer a complete application, which usually includes: • a financial statement, in the form of a questionnaire, that provides detailed information regarding monthly income and expenses • proof of income, if applicable • most recent tax returns • bank statements (usually two recent statements for all accounts), and • a hardship affidavit or statement. • The purchase offer. A short sale application will also most likely require that you include an offer from a potential purchaser. Banks often insist that there be an offer on the table before they will consider a short sale, but not always.

• A second mortgage holder must agree to the short sale. If there is more than one mortgage on the property, both mortgage holders must consent to the short sale. The first mortgage holder will offer a certain amount from the short sale proceeds to second mortgage holder to release their lien, but the second mortgage holder can refuse to accept the amount and kill the deal.

Deficiency Judgments Following Short Sales

Many homeowners who complete a short sale will face a deficiency judgment, though a few states disallow them after this kind of transaction. The difference between the total debt and the sale price is called a “deficiency.” For example, say your bank gives you permission to sell your property for $200,000, but you owe $250,000. The deficiency is $50,000. In many states, the bank can seek a personal judgment against you after the short sale to recover the deficiency amount.

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While many states have enacted legislation that prohibits a deficiency judgment following a foreclosure, most states do not have a corresponding law that would prevent a deficiency judgment following a short sale. How to avoid a deficiency with a short sale To ensure that the bank can’t get a deficiency judgment against you following a short sale, the short sale agreement must expressly state that the transaction is in full satisfaction of the debt and that the bank waives its right to the deficiency.

If the bank forgives some or all of the deficiency and issues you a IRS Form 1099-C, you might have to include the forgiven debt as taxable income. When It Might Be a Good Idea to Let a Foreclosure Happen and Other Issues to Consider

In some states, a bank can get a deficiency judgment against a homeowner as part of a foreclosure or thereafter by filing a separate lawsuit. In other states, state law prevents a bank from getting a deficiency judgment following a foreclosure. If the bank can’t get a deficiency judgment against you after a foreclosure, you might be better off letting a foreclosure happen rather than doing a short sale or deed in lieu of foreclosure that leaves you on the hook for a deficiency. For specific advice about what to do in your particular situation, talk to a local foreclosure attorney. Also, you should take into consideration how long it will take to get a new mortgage after a short sale or deed in lieu versus a foreclosure. Fannie Mae, for instance, will buy loans made two years after a short sale or deed in lieu if there are extenuating circumstances, like divorce, medical bills, or a job layoff that caused you economic difficulty, compared to a three-year wait after a foreclosure. (Without extenuating circumstances, the waiting period for a Fannie Mae loan is seven years after a foreclosure or four years after a short sale or deed in lieu.) On the other hand, the Federal Housing Authority (FHA) treats foreclosures, short sales, and deeds in lieu the same, usually making its home loan insurance available after three years.

Deeds in Lieu of Foreclosure

Another way to avoid a foreclosure is by completing a deed in lieu of foreclosure. A deed in lieu of foreclosure is a transaction in which the homeowner voluntarily transfers title to the property to the bank in exchange for a release from the mortgage obligation. Generally, the bank will only approve a deed in lieu of foreclosure if there aren’t any other liens on the property.

You Might Want to Complete a Deed in Lieu of Foreclosure

Because the difference in how a foreclosure or deed in lieu affects your credit is minimal, it might not be worth completing a deed in lieu unless the bank agrees to: • forgive or reduce the deficiency • give you some cash as part of the deal, or • give you some additional time to live in the home (longer than what you’d get if you let the foreclosure go through). Banks sometimes agree to these terms to avoid the expense and hassle of foreclosing. If you have a lot of equity in the property, however, a deed in lieu is usually not a good way to go. In most cases, you’ll be better off by selling the home and paying of the debt. If a foreclosure is imminent and you don’t have much time to sell, you might consider filing for Chapter 13 bankruptcy with a plan to sell your property.

Just like with a short sale, the first step in obtaining a deed in lieu of foreclosure is for the borrower to contact the servicer and request a loss mitigation application. As with a short sale request, the application will need to be filled out and submitted along with documentation about income and expenses. The bank might require that you try to sell your home before it will consider accepting a deed in lieu, and require a copy of the listing agreement as proof that this has been done.

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Deed in Lieu of Foreclosure Documents

If approved for a deed in lieu of foreclosure, the bank will send you documents to sign. You will receive: • a deed that transfers ownership of the property to the bank, and • an estoppel affidavit. (Sometimes there might be a separate deed in lieu agreement.) The estoppel affidavit sets out the terms of the agreement and will include a provision that you are acting freely and voluntarily. It might also include provisions addressing whether the transaction is in full satisfaction of the debt or whether the bank has the right to seek a deficiency judgment. Deficiency Judgments Following a Deed in Lieu of Foreclosure With a deed in lieu of foreclosure, the deficiency amount is the difference between the fair market value of the property and the total debt. In most cases, completing a deed in lieu will release the borrowers from all obligations and liability under the mortgage, but not always.

Anti-deficiency laws

Most states don’t have a law that prevents a bank from obtaining a deficiency judgment following a deed in lieu of foreclosure. Washington, however, is one state that does prohibit a bank from getting a deficiency judgment after a deed in lieu. So, the bank might try to hold you liable for a deficiency following the transaction. If the bank wants to preserve its right to seek a deficiency judgment, it generally must clearly state in the transaction documents that a balance remains after the deed in lieu, and it must include the amount of the deficiency. How to avoid a deficiency with a deed in lieu of foreclosure To avoid a deficiency judgment with a deed in lieu of foreclosure, the agreement must expressly state that the transaction is in full satisfaction of the debt. If the deed in lieu of foreclosure agreement does not contain this provision, the bank might file a lawsuit to obtain a deficiency judgment. Again, you might have tax liability for any forgiven debt.

The process for completing a deed in lieu will vary somewhat depending on who your loan servicer is and who the lender (or current owner of your loan, called an “investor”) is. Generally, you’ll have to try to sell the property for at least 90 days at fair market value before the lender will consent to accepting a deed in lieu. Also, you usually must have clear title, which means there can’t be other liens on the property. You might have to provide details about your finances and show that the home won’t sell for what’s owed. As part of the deal, the homeowner usually agrees to vacate the home, leaving it in good (“broom swept”) condition, and sign over ownership to the lender. In some cases, the borrower will have to submit an affidavit indicating that the process was voluntary. In some cases, the lender will allow the homeowner to rent the home even after turning over the deed. Fannie Mae, for example, offers this option to borrowers who have Fannie Mae loans. Also, in some cases, the departing homeowner will receive relocation money after completing a deed in lieu.

Call A Foreclosure Lawyer

Some people think that completing a deed in lieu will cause less damage to their credit score than a foreclosure. But the difference in how a foreclosure or deed in lieu affects your credit is minimal. For this reason, it might not be worth doing a deed in lieu unless the lender agrees to forgive or reduce the deficiency, you get some cash as part of the deal, or you get some extra time to live in the home (longer than what you’d get if you let the foreclosure go through). In some cases, the lender will agree to one or more of these conditions to avoid the expense and hassle of foreclosing. Also, you should take into consideration how long it will take to get a new mortgage after a deed in lieu versus a foreclosure. Fannie Mae, for instance, will buy loans made two years after a deed in lieu if there are extenuating circumstances, like divorce, medical bills, or a job layoff that caused you economic difficulty, compared to a three-year wait after a foreclosure. (Without extenuating circumstances, the waiting period for a Fannie Mae loan is seven years after a foreclosure or four years after a deed in lieu.) On the other hand, the Federal Housing Authority (FHA) treats foreclosures, short sales, and deeds in lieu the same, usually making its home loan insurance available after three years. If you have a lot of equity in the property, however, a deed in lieu is usually a poor choice. You’d be better off by selling the property and paying of the debt. If you don’t have a lot of time and a foreclosure is imminent, you might consider filing for Chapter 13 bankruptcy with a plan to sell your home.

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With a deed in lieu, the homeowner may negotiate what will happen to the deficiency, if one exists. Because a deed in lieu is a voluntary agreement between you and the lender, it’s possible to negotiate a deal in which: • the lender agrees not to pursue a deficiency judgment • you agree pay part of the deficiency, or • you agree to repay the deficit over time. Be aware that, if the lender forgives all or part of the deficiency, you might face tax consequences. Should You Let the Foreclosure Go Through? In some states, a bank can get a deficiency judgment against a homeowner as part of a foreclosure or thereafter by filing a separate lawsuit. In other states, an anti-deficiency law prevents a bank from getting a deficiency judgment following a foreclosure. If the bank can’t get a deficiency judgment against you after a foreclosure, you might be better off letting a foreclosure happen rather than agreeing to a deed in lieu of foreclosure that leaves you responsible for all or a portion of a deficiency. (For specific advice about what to do in your particular situation, talk to a local foreclosure attorney.)

If you’re considering completing a deed in lieu, consider talking to a lawyer. Many different foreclosure avoidance options exist, including loan modifications and short sales, and some options might be better than others, especially for specific situations. To find out if a deed in lieu might be right for you or to explore other possible options, contact a lawyer.

Avoiding a Deficiency Judgment

In some states, lenders have the right to sue borrowers for deficiencies after a foreclosure or a deed in lieu of foreclosure. A deficiency is the difference between the amount you owe on your mortgage loan and the price your lender gets for your home when it sells at a foreclosure sale. In other words, if you owe your mortgage lender $300,000 on your house and you default, and the foreclosure sale brings in just $250,000, the deficiency is $50,000. If permitted by state law, the lender can sue you for the $50,000 and get a deficiency judgment—even though it already took the house. With a deed in lieu of foreclosure, the deficiency is the difference between the total debt and the fair market value of the house. As part of the deed in lieu of foreclosure negotiations, you should get your lender to agree to release you from having to repay any deficiency, perhaps in exchange for your agreeing to deliver the house to your lender in good condition. Make sure to get the deficiency waiver in writing. Though, if the lender forgives all or part of the deficiency, you could face tax consequences.

Know Your Options

If you are a distressed homeowner who’s facing a foreclosure, knowing your options is very important. As soon as you realize that you’re in financial distress, call your servicer’s loss mitigation department to find out what alternatives to foreclosure—such as a refinance, loan modification, short sale, or deed in lieu of foreclosure—are available to you. (The servicer is the company that manages your loan account on behalf of the lender. Servicers process borrower payments, manage escrow accounts, and pursue foreclosure for defaulted loans.) You have nothing to lose by calling the servicer and the call might make a huge difference. You will typically be provided a packet of information and documents to complete. If you don’t understand the contents of any of these documents, ask for help, either from an attorney or a free HUD-certified housing counselor. While the foreclosure process can be scary, you have some choice in the matter.

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