FHA Loan, after Chapter 13 dismissal.

banker0679 · Posted: Mon Nov 19, 2007 4:14 pm Post subject:

Fozman...the statement from your lender can be true for them...and it maybe false for others.

Most lenders who are FHA approved don't offer 'manual underwrite', and may not offer FHA loans to borrowers with scores less than 550.
If this is the case..then the broker/lender is trying to bring up your credit score to where it needs to be per their guidelines.

FHA's guidelines state that you may not have any credit lates in the last 12months.....or will need a good letter of explanation.
No foreclosures within 2yrs...no chapter 7 within 2yrs...and no chapter 13 within 1yr.

You would need to show at least 3tradelines that are positive within the last 12months. (some lenders may say less).

I'm a mortgage broker and work with over 440 lenders.
Not all of them offer FHA....and not all offer manual underwrite.
I probably only know of 1-2 that actuall go less than 500 credit scores.
FHA has no credit score requirement...but that doesnt mean the lender wont.

So it may be true with his lender....but you may shop around...and see that it may be done with another lender with the same rates.

fozman68 · Joined: 14 Nov 2007 Posts: 24 10.49 Dollars($)

Well, I took some advise, talked to another lender, to see about their rates, and manuel overwriting. Unfortunatly, I was told they couldn't help me. My credit score dropped somehow to 610, but the reason they couldn't help was because even though the bankruptcy was dismissed in 10/06, my credit report showed mortgage lates for 11/06 12/06 and 1/06, and shows foreclosure started 1/06, then paid off 3/06.
My question is this- FHA looks at 12 months of no lates, is this going to effeect me in 02/08, on getting final approval?
starting to worry, Ken

banker0679 · Posted: Mon Dec 03, 2007 9:16 am Post subject:

I would've gotten a 2nd opinion. If these items are collections some FHA lenders will overlook them...especially if there over 6yrs ago.

Ask your lender if they do Manual Underwrite.
If they dont...this maybe one of the reasons why they're asking for so much.

Right now you shouldn't get higher than 6.25% on a 30yr fixed FHA mortgage

0.10 Dollars($)

banker,

What is your deal with 6.25%? You have told in every one of your posts lateley that the going rate is 6.25%. Please stop as it doesn't help someone to not answer their question and just to write "you should get 6.25%"

If you are approved through manual underwriting your rate will be higher with those lenders than with a normal FHA loan, not 6.25%, more like 7.5%.

This has been my experience and yes, I have an in-house FHA underwriter, you need....

1. 12 months of current payments on everything
2. No judgements or liens
3. All collections, judgements, liens need to be paid off. (except medical bills)

banker0679 · Posted: Mon Dec 03, 2007 12:13 pm Post subject:

OP -
Foreclosures require 2yrs for FHA....this is what is prohibiting you from taking out the FHA for now. If you have a BK 7..it's also 2yrs. BK13 is 1yr

Also, I work with over 440 lenders....find a lender that DOESNT charge to do MANUAL UNDERWRITE, and you will receive a rate for 6.25%.

Ask your broker if they deal with Taylor Bean Whitaker (wholesaler).
They dont charge for Manual underwrite......Their highest rate TODAY is 6.875%.

Normally, a lender may charge the broker 0.5% to perform Manual Underwrite. Of course the broker/lender passes the cost to the borrower.
This is why I like TBW (taylor bean)...no hits for loan amount..and no hits for manual underwrite!

good luck!

livinginnky · Posted: Mon Dec 03, 2007 12:31 pm Post subject:

But when does TBW approve with collections? Could you pm me with your AE's name and phone #. I would greatly appreciate it.

I think he will probably have to take care of them or pay them off.

banker0679 · Posted: Mon Dec 03, 2007 12:33 pm Post subject:

I didnt say anything about collections or judgments.

bottomline is that the OP wont be able to do FHA until 03/08...due to the FC.

Collections that are 2yrs old or more can be ignored.

You should hookup with TBW they have great rates.

banker0679 · Posted: Mon Dec 03, 2007 12:56 pm Post subject:

foz- i looked up the Foreclosure guidelines, and it states 3yrs.

Sorry for the confusion.
I have done a few around 2yrs, but they had valid reasons to why they went into FC.

If you dont have a valid reason the U/W will require 3yrs from when the FC was paid.

sorry once again!

0.10 Dollars($)

I WAS IN CHAPTER 13 FOR 2 1/2 YEARS, DECIDED TO SELL MY HOUSE, AND WAS TOLD BY MY REALTOR TO HAVE IT DISMISSED, SO THAT IT WOULD MAKE IT EASIER TO SELL. CHAP 13 DISMISSED 10/06. HOUSE SOLD, AND WENT TO SETTLEMENT 2/23/2007. I DIDN'T EVEN KNOW THAT THE FORECLOSURE WAS STARTED BACK UP. HAD THREATS OF A FORCLOSURE, BEFORE, THATS WHY I WENT FOR CHAP.13. ? DO I HAVE A CHANCE IN FEB. OR MARCH '08, TO GET A FHA LOAN?

fozman68 · Joined: 14 Nov 2007 Posts: 24 10.49 Dollars($)

sorry, that was me writing, forgot to log back in.

banker0679 · Posted: Mon Dec 03, 2007 2:03 pm Post subject:

depends what your credit report states about the foreclosure.

if it was in the last 3yrs then the answer is no. Sorry.

Be upfront with your loan officer and ask them about this.
Ask them about the Foreclosure on your credit report..and what are the guidelines.

fozman68 · Joined: 14 Nov 2007 Posts: 24 10.49 Dollars($)

It sas : Paid, Closed/Current, foreclosure was started.
I spoke with my broker and he told me to call the mortgage company, and ask them to take it off. Mortgage company asked me to put it in writing, and send to there "Customer Advocate Dept" fax.
Do I have a chance in this happening, or is there a better way?

banker0679 · Posted: Mon Dec 03, 2007 3:17 pm Post subject:

Sounds like you did a short sale?
That means that your M-9 for FC should change to M-5 for a short sale.

Speak to the loss/mitigation department.
There the only one who can provide you the letter you need for the U/W.

In the meantime, dispute your credit report if the FC never happened.

I'm surprised your Loan Officer didnt cover this before.

fozman68 · Joined: 14 Nov 2007 Posts: 24 10.49 Dollars($)

banker,
This wasn't a short sale, and the FC never happened.
you say "speak to the loss/mitigation dept" . are you talking mortgage company that has listed this info on my cr.rep.?
"surprised at loan officer". yeah me too! Any good brokers in Delaware on this site, who want to help me?

banker0679 · Posted: Tue Dec 04, 2007 9:08 am Post subject:

it's up to the Underwriter.

the loss/mitigation will provide you a document that states that the foreclosure never happened.

dispute it on your credit report...and tell them it should say m-5...not an m-9

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