Good Morning,
Apparently there are many borrowers ready to get back into the market after the drama of the last seven years. Here is our policy if a borrower has had a Foreclosure, Bankruptcy, Short Sale and or Loan Modification with principal reduction: Bottom line – 4 years, perfect credit, 4 lines re-established.
Re-established Credit
After a bankruptcy, foreclosure event, in order to meet the definition for an acceptable, re-established credit history, the following criteria must be met:
Time–Frame – Acceptable credit history must have been re-established for a minimum of 4 years. Exceptions to this policy may be considered under the following conditions: • A shorter elapsed time of 2 years is considered to be an acceptable interval for re-establishing a credit record when the adverse action was a Chapter 13 bankruptcy. • Two years is also considered an acceptable interval for re-establishment of credit, if the adverse action related to a Chapter 7, 11, or 13 bankruptcy, as long as the borrower can satisfactorily document that the bankruptcy–related action resulted from extenuating circumstances (reference RLU 404-10 - Extenuating Circumstances.)
Evidence of Re-Established Credit – Whether a bankruptcy or foreclosure occurred due to extenuating circumstances or financial mismanagement, the following requirements must be met: • All accounts are current. • Borrower has a minimum of 4 tradelines or 4 non-credit payment references. • Each of borrower's minimum payment references has been active within the most recent 24–month period. • If the derogatory credit included tradeline credit, then the borrower has re-established at least one tradeline credit. • One of the payment references is housing–related. The housing-related reference is not required when the borrower meets the following criteria: o Borrower has 4 re-established traditional tradelines showing on the credit report, each with a minimum 12 month history. o One of the accounts has a significant balance with a payment (automobile payment or larger credit card) o Borrower is making minimum 5% down payment from his or her own funds (includes EOM loans) • If the borrower has monthly rent payments that weren't reported to the credit repositories, documentation must show that rent payments were timely during the most recent 12 months. • There are no new public records for bankruptcy, foreclosure, unpaid judgments or collections. • No 60–day late payments • No more than two 30–day lates. • No housing payments past due during the applicable time–frame. • Evidence that the credit history does not contain multiple revolving accounts with high balances-to-limits or high overall utilization of revolving credit.
Rates · Rates remain unchanged. · Purchase Special Extended o Available for all FULLY AM 3/1, 5/1, 7/1 and 10/1 ARMs (IO loans do not qualify) o Receive 0.25% improvement to RATE o O/O and Second Home (SFR, PUD and Condo) eligible New Purchase Special to be announced soon. Submit now to secure current special
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