Foreclosure Guidelines for FHA Mortgage Loans in Kentucky

 

FHA Loans in Kentucky with Foreclosure in the Past:

• 3 years from transfer date on Commissioner’s or Transfer deed must have elapsed prior to case number assignment date
• An exception to the 3 year requirement may be granted if the foreclosure was caused by extenuating circumstances beyond the borrower’s control such as a serious illness or death of a wage earner and the borrower has re-established good credit since the foreclosure.  If the exception is granted, the loan must meet all manual underwriting guidelines.
• Divorce is not an extenuating circumstance however an exception may be granted if the mortgage was current at the time of the borrower’s divorce and the ex-spouse received the property and the mortgage was later foreclosed.
• Inability to sell the property due to job transfer or relocation is not considered an extenuating circumstance
• 3 years from transfer of title.   Case number assignment cannot be ordered until the wait period has elapsed
• Same Extenuating Circumstance criteria as Foreclosures
• Pre-Foreclosure (Short Sale) exception for Borrower Current at the Time of Short Sale

1. All mortgage payments on the prior mortgage were made within the month due for the 12 month period preceding the Short Sale;and
2.  All installment debt payments for the same time period were also made within the month due

• Exceptions to the 3 year wait time must follow manual guidelines

 

 

Joel Lobb (NMLS#57916)
Senior  Loan Officer

 

American Mortgage Solutions, Inc.

10602 Timberwood Circle Suite 3

Louisville, KY 40223

Company ID #1364 | MB73346

 

Text/call 502-905-3708
kentuckyloan@gmail.com

 

 

Disclaimer: No statement on this site is a commitment to make a loan. Loans are subject to borrower qualifications, including income, property evaluation, sufficient equity in the home to meet Loan-to-Value requirements, and final credit approval. Approvals are subject to underwriting guidelines, interest rates, and program guidelines and are subject to change without notice based on applicant’s eligibility and market conditions. Refinancing an existing loan may result in total finance charges being higher over the life of a loan. Reduction in payments may reflect a longer loan term. Terms of any loan may be subject to payment of points and fees by the applicant  Equal Opportunity Lender. NMLS#57916 http://www.nmlsconsumeraccess.org/

 

— Some products and services may not be available in all states. Credit and collateral are subject to approval. Terms and conditions apply. This is not a commitment to lend. Programs, rates, terms and conditions are subject to change without notice. The content in this marketing advertisement has not been approved, reviewed, sponsored or endorsed by any department or government agency. Rates are subject to change and are subject to borrower(s) qualification.

If you are an individual with disabilities who needs accommodation, or you are having difficulty using our website to apply for a loan, please contact us at 502-905 3708.  

The Latest Guidelines on Waiting Periods – Valley Business Journal

The Latest Guidelines on Waiting Periods – Valley Business Journal.

 

It might be interesting to update everyone on the latest guidelines on required waiting periods after a Bankruptcy, Foreclosure or Short Sale. The rules seem to change fairly often and, of course, may vary greatly with lenders and mortgage investors.

For conventional financing, basic guidelines at this time show a waiting period of four years after a Chapter 7 or 11 Bankruptcy, two years with extenuating circumstances; after a Chapter 13 Bankruptcy, it would be two years from the Discharge date, four from Dismissal date (two from Dismissal with justifying circumstances). A Foreclosure on your record would mandate a seven-year waiting period, three with extenuating circumstances but with additional restrictions as to the maximum loan-to-value allowed and occupancy of the property. A Short Sale or Deed-in-Lieu on a person’s credit requires a waiting period of at least two years for an 80% loan-to-value and four for 90%, two with mitigating circumstances can be possible up to 90%.

FHA and VA requirements may be considerably different. For example, if a person had a Chapter 7 Bankruptcy, the usual waiting period would be two years for FHA, but under some circumstances it could be moved down to just one, not with VA though. Many factors must be clearly illustrated, including either no new debt since discharge or re-establishment and maintenance of good credit plus a demonstrated ability to manage one’s financial obligations. A new purchase after a Chapter 13 Bankruptcy (where debts are being paid over time) has different guidelines also, primarily being that the Bankruptcy has been in a payout period for at least one year, with satisfactory performance and Court approval. Foreclosures and short sales generally mandate three years with FHA, two with VA.

These are some of the lending policies, but of course a person must also qualify for the new loan – income, stability of same, debt ratios and credit scores are critical. We must measure that with the basic question of whether a person is ready to purchase again and take on ownership responsibilities. Working with an experienced, professional mortgage advisor should be very helpful if you find yourself in this kind of situation.

The snag would come in the underwriting portion of the mortgage application process.

“The IRS office won’t be able to provide the forms to prove income, deal with tax lien information, and the like. Because those documents aren’t available, those loans will be stuck until further notice,’’ Herrera said.

It’s in the intake — the starting of the files — where a backlog could occur, he said.

With the housing recovery in the Inland region still viewed as fragile, any slow-down in sales has a trickle-down effect on the economy.

National Association of Realtors chief economist Lawrence Yun recently pinned the August slow-down in pending home sales — contract signings eased 1.6 percent — on tight inventory conditions, higher interest rates, rising prices and restrictive mortgage credit.

For the three month quarter ended June 2013, nearly 20 percent of the 8,758 mortgage transactions reported to the Inland Valleys Association of Realtors were FHA-insured.

Conventional loans insured by Freddie Mac and Fannie Mae accounted for 34 percent of the transactions; Veterans Administration-backed mortgage applications represented 4 percent of the loan business, Herrera said.

Donavon Ternes, president and chief operating officer of Provident Savings Bank, agreed the FHA-furloughs could end up harming – or bogging down — the number of refinance transactions or purchase money transactions looking for FHA-insurance on the loan.