Post date: Sep 05, 2013 7:32:31 PM
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.
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 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
I appreciate your business…Have a terrific day.