February 20, 2015
A reader asks, “We (had a)Bankruptcy and then a short sale 2 years later. We never re-affirmed the mortgage but it was sold to another company. The original lender reported us discharged, no late payments, but the second company reports us 60 days delinquent, settled for less than owed. When can we apply for a new mortgage? Do we go from the Bankruptcy discharge or the short sale? Do we qualify for the “no late payments” program with less waiting time? We can’t get anyone to give us a straight answer.”
The answer may depend on lender standards. FHA loan rules do permit a borrower to apply for a new loan following a short sale depending on circumstances but being current on the mortgage loan at the time of the short sale is an important aspect.
Because there is a question–at least on paper–as to whether the borrower was current or not, the only way to proceed is to find a lender willing to work with the borrower under such circumstances.
That likely what the reader wants to hear, but due to the disputed delinquency, that’s the best general answer possible. If the FHA loan applicant’s credit report shows a delinquency, that’s what the lender will go by. If the applicant wants to dispute that report, it would be up to the borrower to dispute the delinquency and work with the credit reporting agency in order to clear the record.
There may be other recourse–the borrower could try to work with the lender who reported the delinquency and have the issue corrected, but that would be a matter between the borrower and the lender.
What about FHA loan rules concerning borrowers who were not current on their mortgage loans at the time of the short sale? From the FHA official site:
“Borrowers in default on their mortgage at the time of the short sale (or pre-foreclosure sale) are not eligible for a new FHA
-insured mortgage for three years from the date of the pre-foreclosure sale. Lenders may make exceptions to this rule under certain circumstances.”
Those circumstances would have to be discussed with the lender.
Do you have questions about FHA home loans? Ask us in the comments section. All questions and comments are held for review.
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: