March 28, 2015
A reader asks, “I have a previous property from my divorce showing as a foreclosure on my credit report. The property has actually been in litigation for the last three years and has not been forclosed. My current husband and I are trying to purchase a new home. Do you have any suggestions? Should I apply as a non purchasing spouse?”
The course of action suggested in the reader question may be a good one, but there are some variables that can affect whether or not it is possible to do so.
The first of these is whether or not the reader lives in a community property state where the laws dictate how shared financial responsibility in a legal marriage is handled.
Community property laws may require the applicant(s) and spouse to have their credit data and/or income details shared on the report. The state may or may not require this depending on circumstances, but all borrowers should know it would be at the lender’s discretion in such cases as to how to proceed in cases like those mentioned in the reader question.
That is to say, the borrower and spouse would need to discuss the issues at hand with a lender and see if that particular lender can and/or will work with the borrower. It’s unfortunately not the most specific answer in the world, but due to the variance in state law, it’s really the only one possible in these cases.
Borrowers who may have concerns in this area can also contact the FHA at their toll free number (1-800 CALL FHA) to request a referral to an FHA/HUD approved local housing counselor who may be able to give some advice depending on the counselor’s experience with such issues.
Do you have questions about FHA loans or refinance loans? Ask us in the comments section. Be aware that all comments are reviewed before they are posted to the site.
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
Browse by Date: