Chris Knoche is a loan officer for John Adams Mortgage, which is the mortgage company that Real Estate One owns . Chris makes sure to keep all of the agents in the Real Estate one offices that he serves up to date on the latest news and procedural changes from HUD, FHA, VA and lenders in general. Recently he sent this information out to all of the offices.
We’ve received clarification from HUD on the seasoning requirements for previous foreclosures and the treatment of them going forward. This guidance is not new but has been more clearly defined in the new handbook. Even though the new manual will not be effective until September, we are to use the defined timing rule effective immediately.
For previous foreclosures or deed-in-lieu of foreclosure that are FHA insured, the borrower is not eligible for a new FHA-insured mortgage for three years after HUD pays the claim to the Lender or Servicer.
For previous foreclosures or deed-in-lieu of foreclosure that were VA, USDA , Conventional or any other loan type, a borrower is not eligible for a new FHA insured mortgage until the date that the title ownership of the property changes from the borrower to the lien holder. If the credit report does not indicate the date of the foreclosure or deed in lieu of foreclosure, the mortgagee must obtain the settlement statement, deed, or other legal documents evidencing the date of property transfer. This is not the same as the sheriff’s sale date. The “seasoning” must include the 6 month redemption period as required by law.
In short, the waiting period from a foreclosure is now three and a half years. I am available if you have any questions. Chris Knoche - 248-535-7073.
So those who had the misfortune to go through a foreclosure or who gave up their house in a deed-in-lieu of foreclosure transaction now know more clearly how long they have to wait in order to get another mortgage that is backed by FHA (and thus by HUD).