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I am 3 yrs out on my bankruptcy discharge Feb 2, 2013. Everyone said I am eligible to buy a home then. Now I get a curve ball

saying, Oh no it is 3 years from Sheriff sale which puts me in June. That is insane. I am in a home that is being short saled and we may be on the street because of misinformation. Which is right 3 yrs from Discharge or three years from Sheriff sale. I live in MI by babsis_136_631 from Waterford, Michigan. Jan 5th 2013 Reply


Steven Ceceri (CreativeFinancingOptionsGroup)
#37 ranked lender in Massachusetts - 723 contributions

Was this a Chapter 7 BK and if so, did you also have a house that went to Foreclosure? I'm happy to help you if I can get more information.

Jan 5th 2013
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Barb Lanis (BarbLanis)
#70 ranked lender in Illinois - 663 contributions

Yes, you have two different elements going on with your situation and each waiting period is different. For FHA, the wait period is 2 years after Chapter 7 (discharge date) and 3 years after Foreclosure (transfer of deed). If you would like to start planning for your purchase now, I would recommend taking a look at your credit to make sure it's in good shape. You don't want to assume that all will be perfect once those magic dates arrive. Plan ahead and get your credit report run. We also lend in Michigan, in fact, I grew up in Waterford!

Jan 5th 2013
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Barb Lanis (BarbLanis)
#70 ranked lender in Illinois - 663 contributions

Babsis.. You are splitting hairs. If your Sheriff sale was on X date, then you must wait for 3 years from that exact date in order to close on a new purchase FHA loan. Conventional loans (Fannie and Freddie) wait periods are much longer than FHA, so at least you have an option. You've learned a lot from the responses from lender posts to your questions. Note that you have already met the minimum requirement regarding the BK wait period. Your foreclosure is a Completely Separate element from a lenders perspective, even if you feel that it was all connected personally. Of course it was! From a lending perspective, it was not. Dates are dates.

Jan 5th 2013
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I don't see how to answer your quetions 123LoanYes. Cant see a button to answer so I will reply to my own. :O) Yes it was chapter 7 and we did not keep the house all debts including house and second mortgage were forgiven and discharged 02--2-10.. Our discharge of bankruptcy was Feb 2010 and sheriff sale was June 2010. So our BK date is 02-02-13 which we thought was the date we could buy a home. Now we are told Oh No it is 3 years from Sheriff Sale????

Jan 5th 2013
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Steven Ceceri (CreativeFinancingOptionsGroup)
#37 ranked lender in Massachusetts - 723 contributions

The 3 year time frame would be from the foreclosure sale date and/or when the foreclosure sale deed was recorded.

Jan 5th 2013
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To 123LoanYesSo 3 years from Foreclosure date is Sheriff sale date correct? That is crazy. But nothing we can do at this point. Thank you very much, you have been very helpful. I am at a loss for words on Fannie Mae and Freddie and FHA rules. Funny no one had that information for me except one bank I just talked to the other day...NO ONE has ever said 3 yrs from Sheriff sale they have all said 3 yrs from discharge date..everyone including real estate agents. Thanks again B

Jan 5th 2013
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Ken Burrows (mortgagesforamerica)
#19 ranked lender in Nevada - 572 contributions

It is actually 2 years from discharge of a bankruptcy and if there was a foreclosure involved (which is separate) then the foreclosure sale date is 3 years.

Jan 5th 2013
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Steven Ceceri (CreativeFinancingOptionsGroup)
#37 ranked lender in Massachusetts - 723 contributions

Here is a good reference chart for you to keep. This information should have been given to you once you noted the details of your situation. http://www.mortgagecurrentcy.com/downloads/FHAVA_DerogatoryCreditChart_061011.pdf I am happy to work with you in advance to get you approved to purchase once your timeline expires, so feel free to let me know if you need assistance. Enjoy your weekend!

Jan 5th 2013
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Jack Cyrul (Jack Cyrul)
#4 ranked lender in Michigan - 94 contributions

I have a mortgage product that I may be able to get you in with zero down only after 2 years out of BK. If you're interested in seeing if you qualify call me at 734-395-9027, Jack C.

Jan 5th 2013
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Thanks everyone for your answers it really has helped me. I was just hit with this yesterday and no one ever told me I had two elements involved here. Everyone "EVERYONE" including banks and real estate all said 3 years from discharge date not 3 years from sheriff sale date. I was so taken back by this. I mean we were already looking at homes and getting ready for the Feb 2nd deadline date only to be told it is June 2nd of this year now. I don't suppose there is any lender that will approve this before June is there??? @ Barb thank you, I do have my credit score 696 and we have alot of good income now. I have been working extremely hard to get that number up the last 3 years and have managed to save at least 20% downpayment. So I am ready but now have to wait for all this to happen another 6 months. Just not fair. Banks/Freddie/Fanny/FHA should lighten up on us who just want to do the right thing. Funny too cause no one seems to know the laws here. I have some numbers so I will be contacting you. Thanks again to u all it was helpful.

Jan 5th 2013
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Michelle Curtis Loan Originator NMLS 401173 (EmbassyFundingLLC)
#29 ranked lender in New York - 2,238 contributions

It is three years from sheriffs sale when you have a foreclosure that trumps the BK discharge date.

Jan 5th 2013
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Well I hear everyone about the bankruptcy discharge date and the sheriff sale date. I understand about the sheriff sale trumps the discharge date. But we filled bankruptcy in 2009. Our bankruptcy was totally discharged in Feb 2010. Everything...clean slate. We included our home and second mortgage, went to court had the counseling and discharged!! Our home didn't go to sheriff sale until June 2010. Since we were discharged before sheriff sale wouldn't the discharge come first which means we didn't own a house it was discharged in Feb 2010. Why would I have to wait till Sheriff sale date which is June 2010 when my bankruptcy was discharged before the Sheriff sale. I moved out!!!!

Jan 5th 2013
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Lorne Harvey (lorneharvey)
#80 ranked lender in Washington - 426 contributions

Just an FYI, for conventional financing, the waiting period on a foreclosure is 7 years, and under extenuating circumstances, 3 years. The lenders here are referring to the waiting period on FHA financing.

Jan 5th 2013
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Joe Metzler (JoeMetzler)
#1 ranked lender in Minnesota - 3,697 contributions

This is a common problem. The bankruptcy discharged your debt, and liability for any loses if you "gave up the home." - BUT, the lender will still need to dispose of the home, which will usually be months later. I've seen it take up to two-years! For your possible new loan, lenders go off of the Sheriff Sale date. You have two basic waiting periods involved. Two-years after the bankruptcy discharge date, and three years after the Sheriff sale date. Your "misinformation" is a great example of why you should only speak with a licensed loan officer for this information. Unfortunately, 80% of Loan Officers are unlicensed application clerks, and only 20% are licensed. Visit www.NMLSConsumerAccess.org to see if a Loan Officer is just registered, or actually licensed.

Jan 6th 2013
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Linda Wintersteen (Linda123)
#64 ranked lender in Arizona - 1,256 contributions

The easist way to tell is when the house left your name.. you can have a sherrffs sale date, no buyers , so it can stay in your name i know its crazy but some banks do not want to assume the house , it has something to do with their inventory.. you can have a bk date, a forclosure sale, and it can stay in your name michigan has 6 month redemption, so this might be your case.. linda yourloanpartnerforlife@live.com

Jan 6th 2013
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Well let me tell you, you all are so wonderful to help with this. I am not happy about the answers, but it is what it is. I now know the legality of BK and Foreclosures and the difference. It is sad cause we have to move out of this house which is up for short sale, not my house, and we thought for sure we would be safe buying in Feb at our 3 yr BK discharge. All the bankers, attorneys, real estate agents, no one knew of this until I talked to a licenced loan officer who I thought would give me a preapproval for a home we wanted to buy. She told me about the Sheriff sale date and I didn't believe her. You have really helped me understand the rules. I am thrilled FHA will let me buy at least 3 yrs from Sheriff Sale which will be this June and not 7 years for conventional which I learned from you all. I wonder why that is? I mean you would think they would be grateful someone wants to still buy houses and not have so many rules attached, but to many people ruined the system. Well we will be starting to look in May for a house in hopes that June 2nd will be okay to purchase, unless someone changes the rule the month before I want to buy. Thank you all for such awesome good advice. When I buy I will let you know how it all went down, again thank you all, Barb

Jan 6th 2013
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Steven Ceceri (CreativeFinancingOptionsGroup)
#37 ranked lender in Massachusetts - 723 contributions

Hi Barb! Happy to have been able to explain things in more detail. If you need any help with your mortgage needs in the future, I would be happy to discuss that when the time is right! Feel free to keep my information and follow up with me anytime! Best of luck to you! Steven

Jan 6th 2013
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David Kaner (dkaner)
#37 ranked lender in Michigan - 3 contributions

Sounds like you are asking two different things. If you had a CH 7bankruptcy and have re-established your credit with no late pays, you may be eligible for an FHA mortgage 2 years from the discharged date so figure on 27 months from your file day. If you are referring to a house you owned that was foreclosed, then you may be eligible for an FHA mortgage 3 years from the Sheriff's sale but if the mortgage you held was an FHA mortgage, it will usually be 4 years since you must wait until the mortgage insurance claim is paid. The FHA insurance has been running about 1 year behind in paying these claims. Your file will be run through the government system to check if you have a CAIVARS hit. If you do not have a CAIVARS hit, you may be eligible as soon as 3 years from the Sheriff's Sale but more likely up to 4 years. If you have a CAIVARS hit, they will give you a number to call and they will give you an exact date of your eligibilty.

Jan 7th 2013
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Hi all, Well I have for sure found out that buying another home is indeed 3 years from Sheriff sale. I had my bank give me some good advice yesterday who also gave me a number to a human person from FHA/Hud.. Now just to clear something up, the home I went bk on and foreclosed on was NOT an FHA loan. So I explain this to the FHA person yesterday and she says it is 3 years till discharge date b/c I didn't have an FHA loan before. I am a first time buyer to FHA. (?) I was like wait, keep reading... So she continued to read and said maybe (MAYBE) it is 3 years from Sheriff sale, but was it hardship... to which I said well no one died just lost our jobs and bank or credit cards would not work with us, she then said sounds hardship to me..then proceeded to say it would be up to my bank/lender to qualify me now or make me wait. NOW I AM CONFUSED. I just ask, who is owning this loan of mine? Would it be my bank/lender, FHA or Obama? I mean who carries the stamp that says approved or not approved? My bank/lender or the FHA top banana? Seems like this whole process has been totally confusing and from the beginning of time no one knew what the other said or was doing. If I ask my bank, can you qualify me, they say it is an FHA rule, now yesterday the FHA people told me it was up to the bank /underwritters and if I establised good credit and have shown I am responsible in the last 3 years they should qualify me. Seriously???? So what I am thinking here, I am 3 years out on my BK discharge the 2nd of next month but I am 3 years out on my sheriff sale June 2nd 2013. So knowing what all you have told me, and I appreciate ALL the advice, I believe it is goint to be 3 yrs from Sheriff Sale, but now another curve ball from FHA ...it is up to my lender not them if I can get approved next month or not. See why I am going insane. Thanks all.

Jan 8th 2013
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Ken Burrows (mortgagesforamerica)
#19 ranked lender in Nevada - 572 contributions

Technically it is up to the lender but FHA extenuating circumstances generally mean a death in the family, medical bill or something major. Loss of job or similar doesn't normally qualify. Most lender underwriters go through an FHA division office for an approval or denial on extenuating circumstances in order to fund the loan. The 3 year mark will be determined on what date it is being reported on your credit bureau. If your foreclosure date is being reported the same day as your bankruptcy discharge date that is the date the new lender will go off of. If it is after the sheriff sale then you will need to document that sheriff sale to get the earlier date. Give me a call if you need clarification. P: 888-320-7888 - Ken Burrows

Jan 8th 2013
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