Follow Patrick Linkedin Facebook
Email Patrick Email
Financial
May 15, 2017

New Guidelines Offer Forgiveness for Past Financial Troubles

Sponsored Content provided by Patrick Stoy - Mortgage Consultant/Owner, Market Consulting Mortgage

Time was ticking away. I had some turnovers that day and my shot—usually reliable, sometimes infallible—just wasn’t working. 

My coach pulled me aside and said, “Just get out there and go for it. The past doesn’t matter. Everybody makes mistakes, that’s why pencils have erasers.”

Needless to say, that was a moment from childhood that stuck with me, and it seems especially relevant to the new seasoning requirements for people who have faced a foreclosure, bankruptcy or short sale. People deserve a second chance sometimes, but the forgiveness is not unconditional. There are some guidelines and requirements that borrowers with a short sale, foreclosure or bankruptcy on their credit report have to meet in order to qualify for the purchase of a home or an investment property.  

For some of the major lending institutions, the seasoning requirements for various types of mortgage loans available to real estate buyers and investors are:

  • Conventional – The guidelines to obtain a conventional loan are among the most stringent. Borrowers with a foreclosure on their record will have to wait seven years from the date of completion. Those with a bankruptcy in their past will have to wait a minimum of two years from the date of discharge, and four years from the dismissal date. Buyers with a history of a short sale have to wait four years from completion.
  • FHA – The requirements to secure an FHA loan are not as severe. Three years is the magic number for borrowers with a foreclosure on their record. Buyers with a Chapter 13 bankruptcy in their background will need to show satisfactory payment performance over the course of a year and also obtain permission from the court. Those with a Chapter 7 in their past will need to wait two years from discharge. For borrowers with a short sale, there is no seasoning period, provided they have made all their payments on time for the 12 months prior to the short sale, and made all their payments on time for the 12 months preceding the loan application for the new mortgage.
  • VA – Borrowers with a foreclosure in their past will have to wait two years. The guidelines for those with a bankruptcy are the same as with FHA. Those with a short sale in their past will have to wait two years.
  • USDA – The guidelines for USDA borrowers are exactly the same as with VA, except the seasoning policy for borrowers with a foreclosure is three years instead of two.
  • Jumbo – Borrowers with a prior credit issue will have to wait seven years.
  • Fresh Start – As the name implies, this loan has the least stringent guidelines. There is no seasoning requirement for borrowers with a foreclosure, bankruptcy or short sale in their past.
  • Homeowner’s Access – This is another loan with guidelines that are not as strict as many other options. In general, borrowers who have experienced a credit problem in the past will have to wait two years before securing this type of loan.
There are many financing options out there for those who have face a short sale, foreclosure or bankruptcy, and there is almost always a solution available for even the most complicated obstacle. For a discussion about your options, please contact me at the number below.    

Patrick Stoy (NMLS Numbers 39527 and 39166) has 16 years of mortgage lending experience. Patrick is CEO of Wilmington-based Market Consulting Mortgage, which he started in 2005 with a mission to build lifelong customer relationships by providing real value. To learn more about Marketing Consulting Mortgage, visit www.macmtg.com. Patrick can be reached at [email protected] or 910-509-7105.

Other Posts from Patrick Stoy

Mcm 14jan insight
Ico insights

INSIGHTS

SPONSORS' CONTENT
Rob20beale2 311791810

The Key to Project Success

Rob Beale - W.M. Jordan Company
Deedee gasch

Ten Questions with Laurie King, Vice President, Director of Corporate Relations at MCO Transport, Inc.

Deedee Gasch - Cranfill Sumner & Hartzog LLP
Leath 683x10242

How to Fire Someone Effectively

Lisa Leath - Leath HR Group

Trending News

Local Communications Co-op Offering Wireless Service Again

Johanna Cano - May 24, 2019

Reprisal Crew Readies For Action In Wilmington

Jenny Callison - May 24, 2019

In The Current Issue

Creating A Digital Arts Workforce

UNCW launched its digital arts program in fall 2017, hoping to prepare students in all facets of digital art through coursework that include...


MADE: Churning Out Profits

All the company’s handcrafted sandwiches are made in Wilmington, starting with homemade cookies and small-batch ice cream....


Battleship North Carolina Unveils Its New Dock

A new dock will give Battleship North Carolina visitors a fresh angle to experience the World War II vessel, moored at 1 Battleship Road....

Book On Business

The 2019 WilmingtonBiz: Book on Business is an annual publication showcasing the Wilmington region as a center of business.

Order Your Copy Today!


Galleries

Videos

2019 WilmingtonBiz Expo Keynote Lunch - CEO, nCino, Pierre Naude`
Transporting the Future - Power Breakfast 3.12.2019
Health Care Heroes 2018