Bankruptcies, Foreclosures, Divorce

Waiting Periods for
Bankrupts & Foreclosures

There’s a common misconception; that after a short sale, bankruptcy or foreclosure, you’ll have to wait 7 years before you can get a new mortgage.

Here’s some good news regarding the waiting periods.

FHA has NO waiting period on a short sale, if you are current at the time of the sale, and on time for the past 12 months.  If you were in default at time of the short sale, FHA will make you wait 3 years. The shortest waiting periods for Bankruptcy is on chapter 13. Where FHA and VA only 1 year waiting period! They will require 2 years for chapter 7 or 11.

Fannie Mae and Freddie Mac are more conservative and will either require more money down or make you wait up to 7 years although with specific extenuating circumstances, they too will shorten the wait periods to 2 years. All agencies have extra rules to allow for extenuating circumstances. S0, if you planned the foreclosure, the agencies could require that you wait 7 years regardless. BUT if you had a serious illness, you might be able to shorten the waiting period to 1 year There is hope at the end of the tunnel and it can come a lot sooner than you thought.

However, guidelines change or may be subject to lender overlays which add on more conservative rules to what the agencies will allow. So, shop around and visit the agency websites at HUD.gov and VA.gov.

Testimonial

"Kurt assisted my wife and I to get a mortgage when we first arrived in the USA and had no credit history. He explained the complexities, found the right product and made it happen swiftly.... Results! He's also a nice guy!"

Clive D, West Palm Beach, FL

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