New FHA Guidelines To Help Boomerang Buyers
Did You Lose a Home to Foreclosure or Bankruptcy?
The Obama Administration has changed FHA lending guidelines more forgiving to former homeowners who lost their homes due to the economic downturn, foreclosure, bankruptcy, short sale or other adverse recession related financial event.
The guideline change allows these borrowers to be eligible for a mortgage, IF they have repaired their credit, in as little as one year versus the 3 years previously required.
Honestly this is a long time in coming. I was talking about this 3 or 4 years ago but I guess the depth of the crisis really wasn’t apparent until now. It’s a good change to see and a step toward acknowledging that not all of the blame for what occurred in the housing crash rests on the shoulders of the homeowner.
To be eligible for this program the borrower must document and prove that the situation that caused their financial issues was beyond their control, that their incomes have made a full recovery and complete housing counseling before getting a new mortgage.
The Catch
This program expires in 3 years and there not be a lot of lenders who are going to work with these guidelines. There could be a lot of inherent risk involved in loans where the borrower has a “tarnished” credit history.
That said, I’ve sent out emails to my lenders to see whose using these guidelines and who isn’t. I’ll update this post as soon as I hear back from my lending resources.
One of my lending resources and fellow Roseville Rotarian, Scott Otsuka, said that lenders will most likely be conservative with these changes for a while due to the risk involved.
Another lending resource, Sandra Temple from Wells Fargo has said that Wells will come out with an update in October but that she doubts they will embrace the one year timeline.
I think this will be the case with the larger lenders across the board unless the government makes the incentive to good to pass up but even then these loans need to be marketable on the secondary market to be viable.
Anyway, these new guidelines are a step in the right direction to getting the real estate market and industry into full recovery mode and the 3 year deadline might just do the trick.
Thanks for visiting!
Buying or selling a home in Rocklin? If so, I’d like to help you. Please call or text me directly at 916-532-7653 or click here, for my contact page.
Rocklin Real Estate Views is the most comprehensive online source for Rocklin real estate information. Whether you are looking for the latest sales, trends or homes for sale in Rocklin, Rocklin Real Estate Views has it all at your fingertips.
Subscribe to Rocklin Real Estate Views by Email
