FHA now allowing Loans 12 months after Foreclosure

Posted by Richard Simpson
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FHA now Allowing Loans 12 months after Foreclosure

By:  Richard Simpson – Perpetual Financial Group, Inc

Monday, Aug 26, 2013

FHA is now allowing Borrowers who have suffered a foreclosure or or bankruptcy during the recent recession may still be able to qualify for an FHA mortgage.  Under the new guidelines established (HUD).

 

The new rules allow borrowers whose credit was damaged due to a temporary loss of employment or income to still qualify for an FHA mortgage if they've recovered from that situation and maintained a clean credit history for at least 12 months. Click hereApply Now

 

That means that borrowers who recently experienced a bankruptcy, foreclosure, short sale, loan delinquencies, debt collections or other events that had a negative impact on their credit may still be able to qualify for an FHA loan in as little as one year after that event. Still regarded as good credit risks. 
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"As a result of the recent recession many borrowers who experienced unemployment or other severe reductions in income, were unable to make their monthly mortgage payments, and ultimately lost their homes," wrote Asst. Housing Secretary Carol Galante in a letter to lenders outlining the new guidelines. "FHA recognizes the hardships faced by these borrowers, and realizes that their credit histories may not fully reflect their true ability or propensity to repay a mortgage." 
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To qualify, borrowers must be able to show that their credit impairments were the result of a loss of employment and/or income that was beyond their control, and which reduced their income by at least 20 percent for a period of at least six months. They must have resolved ny outstanding debt issues that were not cleared away by foreclosure or bankruptcy, and not have any credit blemishes over the past 12 months

 

In addition, borrowers must undergo credit counseling in order to be approved, which may be done in person, by telephone, over the Internet or by any other method the FHA approves.

 

Special rules for renters:

Borrowers with non-traditional credit may qualify if they have no history of missing rent payments, no more than one 30-day delinquency to other creditors and no history of collection accounts other than those arising from medical bills or identify theft.  Click here toApply Now

 

Even before the new guidelines were announced, the FHA had considerably shorter waiting periods for borrowers who had gone through foreclosure or bankruptcy than for conventional mortgages. Formerly, borrowers could be approved for a new FHA mortgage in as little as three years after a foreclosure or two years after a Chapter 7 bankruptcy, assuming certain guidelines were met.  Click here toApply Now

 

Foreclosures and bankruptcies will still remain on borrowers' credit reports for 7-10 years and will continue to negatively affect their credit scores during that time.  The new guidelines take effect immediately and will be in force through at least Sept. 30, 2016. 
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Richard Simpson NMLS # 1068719
 
e-Mail:  richard.simpson@theperpetual.com  
Perpetual Financial Group, Inc.
Georgia Licensed Residential Lender # 17706
NMLS # 136261
1838 Old Norcross Road,
Suite 400 Lawrenceville, GA 30044
Phone: 404-788-4420 Fax: 678-262-3595