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

Like Father, Like Daughter

Robert Burrus - Cameron School of Business - UNC-Wilmington
Chris coudriet

2020: A Year Of Action, Initiatives In New Hanover County

Chris Coudriet - New Hanover County Government
Sherrip2019 insights profile

That’s Who We Are

Sherri Pridgen - Cape Fear REALTORS®

Trending News

Luxury Student Housing Sells For $27M In Wilmington

Cece Nunn - Feb 24, 2020

Next Glass Acquires BeerAdvocate Assets, Including Website

Christina Haley O'Neal - Feb 24, 2020

Holt Family Adds New C-Store To Business Portfolio

Christina Haley O'Neal - Feb 26, 2020

Dockbuilder Plans To Move, Grow In Castle Hayne

Christina Haley O'Neal - Feb 24, 2020

Port: Coronavirus Impacts To Cause Some Missed Sailings

Christina Haley O'Neal - Feb 25, 2020

In The Current Issue

Coffee Connects Entrepreneurs

With plenty of coffee on hand, the Wilmington chapter of 1 Million Cups launched this month, with the goal of connecting and providing resou...


Taking Stock Of Townhome Appeal

Construction of and plans for townhomes and other attached housing types have been on the rise in the Wilmington area as land prices increas...


Info Junkie: Jerry Coleman

Jerry Coleman, regional director of the Small Business Center at Cape Fear Community College, shares his top info and tech picks....

Book On Business

The 2020 WilmingtonBiz: Book on Business is an annual publication showcasing the Wilmington region as a center of business.

Order Your Copy Today!


Galleries

Videos

2019 Health Care Heroes
August 26, 2019 Power Breakfast: A Healthy Sale?
2019 WILMA Leadership Accelerator
2019 WilmingtonBiz Expo Keynote Lunch - CEO, nCino, Pierre Naude`