The Federal Housing Administration (FHA) is allowing borrowers who went through a bankruptcy, foreclosure, deed-in-lieu or short sale to reenter the market in as little as 12 months. Previously, borrowers who experienced a foreclosure had to wait at least three years before getting a chance to be approved for an FHA loan. To qualify for the more lenient approval process, documents must show ‘certain credit impairments’ were from loss of employment or loss of income that was beyond the borrower’s control. The lender must also verify the income loss was at least 20 percent for a period lasting for at least six months.
Additionally, borrowers must demonstrate they have fully recovered from the event that caused the hardship and complete housing counseling. Housing counseling must come from a HUD-approved housing counseling agency and be completed at least 30 days but no more than 6 months before applying for a loan. Recovery from an economic event involves reestablishing ‘satisfactory credit’ for at least 12 months. The criterion for ‘satisfactory credit’ includes 12 months of good payment history on either a mortgage, rent or credit card account.
This more lenient approval process applies to case numbers assigned on or after August 15, 2013 and is effective through September 30, 2016.
Choosing the right attorney can make the difference between whether or not you can keep your home. A well-qualified Miami foreclosure defense attorney will not only help you keep your home, but they will be able to negotiate a loan that has payments you can afford. Miami foreclosure defense attorney Timothy Kingcade has helped many facing foreclosure alleviate their stress by letting them stay in their homes for at least another year, allowing them to re-organize their lives. If you have any questions on the topic of foreclosure please feel free to contact me at (305) 285-9100. You can also find useful consumer information on the website, www.miamibankruptcy.com.
