How Foreclosures and Bankruptcy Affect Future Mortgages
Friday, July 22, 2011
The state of today’s home market is being felt across the country as well as here in Elmhurst. Your real estate representative is forced to handle situations that have not been seen in many years. From short sales, to foreclosures, to bank-owned homes, The Gracik Makinney Real Estate Group is well equipped to handle any eventuality. Common questions we hear are
- How will my credit be affected by a foreclosure?
- What will my waiting period be for my next loan if I have foreclosed or declared bankruptcy?
In a recent email from Old Second Bank’s Sue Welsh, the considerations for financing were spelled out by lending scenario and lending group. The information is below:
| Foreclosure | Short Sale Deed-In-Lieu |
Ch. 7 Bankruptcy |
Ch. 13 Bankruptcy |
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| Fannie Mae | 7 Yrs from completion date |
2 Yrs with max 80% LTV 4 Yrs with max 90% LTV 7 Yrs > 90% LTV |
4 Yrs from discharge or dismissal date |
2 Yrs from discharge date 4 Yrs from dismissal date |
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| Freddie Mac | • 7 Yrs from completion date • 4-7 Yrs max 10% down |
• 4 Yrs from completion date for short sale • 4 Yrs for deed-in-lieu |
4 Yrs from discharge or dismissal date |
2 Yrs from discharge date |
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| FHA | 3 Yrs from completion date |
3 Yrs from completion date |
2 Yrs from discharge date |
1 Yr of the payout must elapse & payment performance must be satisfactory; buyer must receive permission from the court to enter into a mortgage |
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| VA | 2 Yrs from discharge date |
No specific information in this yet, assume foreclosure rule of 2 Yrs |
2 Yrs from discharge date |
1 Yr of the payout must elapse & payment performance must be satisfactory; buyer must receive permission from the court to enter into a mortgage |
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| USDA Rural | 3 Yrs from completion date |
3 Yrs from completion date |
3 Yrs from discharge date |
1 Yr of the payout must elapse & payment performance must be satisfactory; buyer must receive permission from the court to enter into a mortgage |
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| Jumbo* | Based on specific investor guidelines | |||
