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
Burrus rob headshot 300x300

Cameron M.B.A. Alumna Keeps Wilmington WARM

Robert Burrus - Cameron School of Business - UNC-Wilmington
Tysonemery

Why Move to Wilmington?

Tyson Emery - KBT Realty
Dallas headshot 300x300

Balancing Goals in Family Transfers

Dallas Romanowski - Cornerstone Business Advisors

Trending News

Ohio Company Acquires Wilmington Based Environmental Consulting Firm

Cece Nunn - Jul 19, 2018

Area Restaurants Earn Wine Spectator Recognition

Jessica Maurer - Jul 18, 2018

New Businesses Open, On The Way To Beau Rivage Marketplace

Cece Nunn - Jul 20, 2018

Airport Terminal Expansion Project Set To Move Forward Ahead Of Schedule

Christina Haley O'Neal - Jul 19, 2018

Local Food Delivery Services React To Uber Eats

Jessica Maurer - Jul 18, 2018

In The Current Issue

What’s Next In Local Grocery Wars?

The Cape Fear region is likely to remain a tempting prospect for grocery store chains considering areas for growth, developers say, although...


SBA Pilots Streamlined Disaster Lending Program

With hurricane season officially upon us, the U.S. Small Business Administration has announced the launch of a new quick lending program aim...


Pat Koballa Shifts Gears

Pat Koballa recently ended 32 years as an executive general manager with Stevenson Automotive Group to begin his new journey as an owner of...

Book On Business

The 2018 WilmingtonBiz: Book on Business is an annual publication showcasing the Wilmington region as a center of business.

Order Your Copy Today!


Galleries

Videos

2018 Power Breakfast - Dishing on the Restaurant Biz
2018 WilmingtonBiz Expo - Keynote Lunch with Eric Dinenberg, Rouse Properties
2017 Health Care Heroes