Showing posts with label Short Sales. Show all posts
Showing posts with label Short Sales. Show all posts

Can you buy a house in Kentucky with Bad Credit?

Getting Approved for a Mortgage Loan in Kentucky with Bad Credit.

 Mortgage late payments: One late payment in the last 12 months is permitted so long as it can be explained and fully documented if necessary.

• Foreclosure: Thirty-six months from the date of the foreclosure until eligibility to repurchase using the 3.5 percent down payment FHA Loan, 48 months for VA Loans (no money down required), seven years no matter the down payment on a conventional type.

• Short sale: Thirty-six months from the date of the short sale until eligibility to repurchase using the 3.5 percent down payment FHA Loan, 24 months with the VA, 24 months on a conventional money loan with a minimum down payment of 20 percent.

Bankruptcy: Chapter 7 (Chapter 13 is less common), 24 months from the date of discharge until eligibility to repurchase using the 3.5 percent down FHA Loan, 48 months on VA Loans (still no money down required),  48 months on conventional no matter the down payment. All mortgage companies have different thresholds of risk appetite. For example, the FHA (Federal Housing Administration) has no credit score requirement. Why, then, do lenders have a minimum credit score requirement of 620 for an FHA Loan? Unbeknownst to the majority of home buyers, many mortgage companies have a secret ominous business strategy.

Enter “investor overlays.” 
Investor overlays are adjustments to guidelines and/or pricing created in favor of the mortgage company. This is exactly why one lender can do the loan, and another lender cannot do the loan in some instances.
Tip: every mortgage lender has investor overlays, it’s the nature of how mortgage companies operate, key is work with the lender whose overlays are minimal.

Typically speaking, if you want to get a mortgage after bankruptcy you’ll need to allow time to pass. For conventional mortgages you’ll need to wait four years after Chapter 7 bankruptcy or two years after Chapter 13 bankruptcy. But there are some other mortgage options that require a shorter waits.

FHA Mortgage

Two years after your Chapter 7 bankruptcy discharge you may apply for an FHA loan. If you filed Chapter 13 bankruptcy, then you’ll only need to wait until you’ve made twelve months of satisfactory payments, and you’ll need to get the approval of the bankruptcy trustee. But if you want to be given serious consideration, you’ll need to provide a clear explanation for why you filed bankruptcy. For example, maybe you filed Chapter 13 bankruptcy because you had a medical emergency and was unable to pay your medical bills.

VA Mortgage

If you’re a veteran, you can get a VA mortgage two years after your bankruptcy discharge. This VA application process can be challenging, but in some ways it’s more lenient since post-bankruptcy credit issues such as a foreclosure won’t restart the 2-year waiting period. However, credit issues after bankruptcy might affect your interest rate, so take care to keep your credit as clean as possible.

USDA Mortgage

If you live in a rural area, you may qualify for a USDA mortgage three years after your bankruptcy discharge. It’s important to note that while the USDA provides loans to rural residents it’s only for property that will serve as the borrower’s primary residence. The USDA will not finance the purchase of income property or a vacation home.
As you prepare to apply for a mortgage after bankruptcy, keep in mind that the mortgage lender will take into account the totality of your financial situation—your finances, credit history, credit score, and any extenuating circumstances

13,foreclosure,Short Sales,chapter 7,bankruptcy va mortgage,bankruptcy usda mortgage,FHA Mortgages and Bankruptcy,Bankruptcy,

Bankruptcy, Foreclosure, Short-sale for Kentucky Conventional, FHA, VA, Mortgage Loan Guidelines

Buy a Home Again After Foreclosure Short Sale or Bankruptcy FHA Conventi...

What Is a Short Sale for Mortgage Loan in Kentucky Mean?

How long do you have to wait to buy a house again in Kentucky after a Bankruptcy or Foreclosure?

How long do you have to wait to buy a house again in Kentucky after a Bankruptcy or Foreclosure?

Joel Lobb

Senior Loan Officer


text or call my phone: (502) 905-3708

email me at

The view and opinions stated on this website belong solely to the authors, and are intended for informational purposes only. The posted information does not guarantee approval, nor does it comprise full underwriting guidelines. This does not represent being part of a government agency. The views expressed on this post are mine and do not necessarily reflect the view of my employer. Not all products or services mentioned on this site may fit all people. NMLS ID# 57916, ( 

Fannie Mae Waiting period for Foreclosures, bankruptcies, and short sales for a new mortgage loan approval


Derogatory ItemWaiting Period
ForeclosureHome given back to the bank – No owner participation
Short Sale
Deed in Lieu of Foreclosure
New rule - started August 16. 2014
Short Sale = Home sold but sales price less than owned
Deed in Lieu = Home returned to lender in exchange for forgiving loan

Bankruptcy – Chapter 7Debts are discharged through BK, client does not pay any debts owing
Bankruptcy – Chapter 13Debts are paid back on a monthly scheduled payment plan

Bankruptcy AND Foreclosure
House INCLUDED in bankruptcy
New rule - started August 16, 2014Bankruptcy AND foreclosure, with home foreclosed on included in bankruptcy. Waiting period is based on bankruptcy discharge date, not foreclosure date, regardless of how long after the bankruptcy the official foreclosure occurred. Fannie Mae only


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Kentucky VA Mortgage Guidelines after a bankruptcy, foreclosure, short sale.

Kentucky VA Mortgage Guidelines after a bankruptcy, foreclosure, short sale. 

2 years completion date needed after a short-sale, foreclosure, or deed-in lieu of foreclosure.

If extenuating circumstances exist – 12 months from completion date with re-established credit
Note: If the occurrence was on a  Kentucky VA loan, the veteran may not have full entitlement available for the new loan.

2  year completion needed after a Chapter 7 bankruptcy
If extenuating circumstances exist – 12 months from discharge or dismissal date with re-established credit.

If it was a Chapter 13 Bankruptcy, a minimum of 12 months of payments have been made, all payments have been paid satisfactorily and Trustee or Bankruptcy Judge approval of new mortgage loan.

Joel Lobb
Senior  Loan Officer

 phone: (502) 905-3708
 Fax:     (502) 327-9119

 Company ID #1364 | MB73346

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FHA Mortgage Guidelines for a Louisville Kentucky FHA Mortgage

FHA Mortgage Guidelines for a Louisville Kentucky FHA Mortgage

FHA expands mortgage backing to the once bankrupt | 2013-08-16 | HousingWire

FHA has issued 3 mortgagee letter out this week, with big changes coming on October 15th! FHA will now allow serious job loss or income reduction (20% reduction in income)to be counted as an extenuating circumstance. Buyer might be eligible to purchase a new home after a 12 month waiting period with excellent re-established credit and documentation of income loss and credit counseling. Stay tuned! More info to come but this will certainly help get more buyers into the market in our area.

According to a letter sent to mortgage lenders, the FHA said it would offer mortgage insurance to borrowers who, during the recession, filed for bankruptcy or lost their homes through a foreclosure or short-sale proceeding.
The insurance is now available to those who can prove they are no longer financially compromised — and met all other FHA requirements.
"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," the letter says.
Besides the burden of proof on the borrower to demonstrate a recovery from the "economic event," the potential homeowner must also complete housing counseling. This event would need to result in a minimum loss of 20% of the household income.
Joel Lobb (NMLS#57916)
Senior  Loan Officer
502-905-3708 cell

FHA expands mortgage backing to the once bankrupt | 2013-08-16 | HousingWire
FHA expands mortgage backing to the once bankrupt | 2013-08-16 | HousingWire

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Kentucky Mortgage Loan Approval for USDA, FHA, VA, and Fannie Mae with a previous short sale or foreclosure. How long do you have to wait?

 Obtaining new financing after a Short Sale or Foreclosure for a Kentucky USDA, FHA, VA, and Fannie Mae Loan?

  Kentucky Mortgage Short Sale:
Conventional Loans Require:

Minimum 2 years with restrictions up to 7 years
2 to 4 years - 80% maximum LTV
4 to 7 years - 90% maximum LTV
7 years and after allow for maximum standard financing

Kentucky FHA and Kentucky VA Loans Require:

3 years, with exceptions possible for less time if borrower's credit and mortgage payments were in good standing prior and up to date of Short Sale

  Kentucky Mortgage Foreclosure:
Conventional Loans Require:

7 years, with exceptions considered between 3 to 7 years if significant extenuating circumstances exist

Kentucky FHA and Kentucky VA Loans Require:

FHA: 3 years, with exceptions possible for less time if significant extenuating circumstances exist
VA: 3 years, with exceptions possible for less time if significant extenuating circumstances exist

Please contact me for a free mortgage pre-approval or with questions!

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Do you qualify for the Back to Work Program in Kentucky for home buyers with previous short sale or foreclosure less than 2 years?

Kentucky FHA HUD Back to Work Program for FHA Borrowers in Kentucky 

What is Back to Work?

FHA icontinuing its commitment to fully evaluate borrowers who have experienced periods of financial difficulty due to extenuating circumstances.

Many borrowers experienced periods of recession related financial difficulty and/or credit impairment resulting from unemployment or severe reduction in income. FHA recognizes thhardships faced by these borrowers, and that their credit histories may not fully reflect their true ability or propensity to repay a mortgage.

For Purchase transactions with case numbers assigned on or after August 15, 2013 

Are borrowers with a foreclosure, short sale, or bankruptcy eligible for Back to Work?

The alternative guidance in Mortgagee Letter 2013-26 is effective for purchase applications with 
case numbers assigned on or after August 15, 2013 through September 30, 2016.

All delinquent accounts and indications of derogatory credit, including collections and judgments, 
bankruptcies, foreclosures, deeds-in-lieu, short sales, and other credit problems must be analyzed.

The lender must review the credit report and determine whether derogatory credit was the result of 
an Economic
• The borrower exhibited Satisfactory Credit prior to the Economic Event Onset;
• The borrower’s derogatory credit occurred after the Economic Event Onset, and
• The borrower has re-established Satisfactory Credit for a minimum of twelve (12) months.

Foreclosure, Short Sale, Deed in Lieu, Bankruptcy

In all cases, the lender must verify that the derogatory credit was the result of an Economic Event 
and document that a minimum of 12 months has elapsed since the date of the:
• foreclosure
• deed in lieu
• short sale
• discharge of Chapter 7 bankruptcy
Chapter 13 Bankruptcy
The lender must verify and document that
• the Chapter 13 bankruptcy was discharged prior to loan application and all required bankruptcy 
payments were made
on-time, or
• a minimum of 12 months of the pay-out period under the bankruptcy has elapsed and all required 
bankruptcy payments were made on time, and
• the bankruptcy was the result of an Economic Event
If the bankruptcy was not discharged prior to loan application, the borrower must receive written 
permission from the
Bankruptcy Court to enter into the mortgage transaction.

Important Back to Work Definitions

HUD announced several key terms that must be reviewed in accordance with this program.

  • Economic Event: an occurrence beyond the borrowers control that resulted in a Loss of Employment, Loss of Income or a combination of both which resulted in a loss of Household Income of 20% or more for a period of six or more months.
  • Onset of Economic Event: the month of the start of or loss of income.
  • Recovery from an Economic Event: the re-establishment of acceptable or satisfactory credit. Satisfactory Credit equates to no derogatory credit for any mortgaged or leased property in the 12 months preceding the mortgage application. This also includes any installment or revolving debt for the same period.
  • Borrower: “Borrower” includes all parties including primary and/or co-borrower as listed on the loan application.
  • Borrower Household Income: the income of all parties on the application or Household Members as listed from the previous Economic Event and derogatory credit.
  • Housing Counseling: Counseling from a HUD-approved housing counseling agency related to home ownership and meets acceptable requirements.

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    Kentucky Mortgage Fannie Mae Guidelines for 2013 to include Bankruptcies, Foreclosures, Deeds in Lieu, Preforeclosure Short Sale

    Kentucky Mortgage Conforming loans receiving an acceptable finding through DU follow Conforming guidelines.

    To be considered for a mortgage loan, the borrower must have re-established a satisfactory credit history and demonstrated the abilitto manage financial affairs prudently. (Satisfactory" means that the mosrecent rating has a rating of "1".) The bankruptcy must havreestablished a credit record for an elapsed time of 4 years. Elapsed time is measured by comparing the date of the application fort he new mortgagloan to:

    The date a Chapter 7, 11, or 12 bankruptcy was discharged;
    The date a Chapter 13 repayment plan was successfully completed and dischargedThe elapsed time of 7 yearis required for the following:
    The date of a foreclosure sale.

    Borrowers which have previously incurred a Deed in Lieu of Foreclosure oPreforeclosure Sale (ShorSale) are subject to a tieredgroup of waiting period requirements. If the borrower has re-established satisfactory credit history within a period below, they willbe subject to a maximum LTV as per thfollowing:

    Waiting Period
    Additional Requirements
    Two years
    80% maximum LTV ratios
    Four years
    90% maximum LTV ratios
    Seven years
    Standard maximum LTV ratios

    Note: Additional Requirements can never exceed the standard maximum LTV ratio

    If a bankruptcy has been discharged within the past years, the following items are required in the Credit
     File to determine the credit's acceptability: Discharge of bankruptcy
    Schedule ocreditors (secured or unsecured)
    Detailed explanation from the borrower
    Verification that satisfactory credit has been re-established. Regardless of the reason, if the borrower’s credit history includes a bankruptcy filing or foreclosure-related action, she/he must have re-established credit for at least four years (or as dictated by policy) and established a new payment record that illustrates a willingness and ability to manage his/her finances overtime and if applicable, under different economic conditions. All accounts must be current as of the date of the mortgagapplication. In addition, the borrowers credit history must include:
    o A minimum ofour credit references, with at least one traditional credit reference, and one housing related reference, all of which must have a satisfactory payment history. Three of the four credit references (including anyr ental housing reference) must have been active for a full 24 months before the date of the mortgagapplication.
    o No more than two installment or revolving debt payments   30 days past due in the last
    24 months.
    o No installment or revolving debt payment   60 days past due since the discharge or

    Joel Lobb (NMLS#57916)Senior  Loan Officer
    502-905-3708 cell


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