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looking at HELOC after a foreclosure...but we now own our current home outright

Long story...hubbie's work closed down during the recession leaving him out of money for over 15 months with some sporadic employment here and there. We attempted to modify three times without success (and am involved with the attorney general lawsuit for the State of MN because of this). The house went into foreclosure after an unsuccessful shortsale attempt, and we were able to settle our second which I'm still paying on per agreement. I had continued to pay our other debts like clockwork. We were blessed with family support and bought a home that we rehabbed and later sold to now owning our current home clear including paying off family. Our scores are in the high 600's (680 one actually coming thru around 700). I pulled a loan out of retirement funds to pay part of the family obligation as well as now have some big box store credit (Menards/Home Depot) that was used to "fix up" this current house that had needed repairs. We'd like to get a HELOC to consolidate debt on a much lower interest rate as well as eventually get the windows replaced. We debate paying off the retirement loan - although I think it's a good idea since the payment is $800. I can't go to my credit union since that's where my settlement is. Any suggestions? The foreclosure was back in 2010. We earn fairly good income. by tinaob_575_607 from Saint Paul, Minnesota. Mar 31st 2013 Reply

Bert Carpenter (BertCarpenter)
#37 ranked lender in Arizona - 1,823 contributions

Because of the nature of HELOCS, most banks that issue them require stellar credit and because of your previous foreclosure, and work out on the second, it is unlikely you will be approved for one. Once the foreclosure is three years old, you would be eligible for a new FHA first mortgage, although it would require mortgage insurance. We have a portfolio product for that can help with borrowers as soon as one day out of a foreclosure, short sale or Deed in lieu of foreclosure that does not have mortgage insurance, but we do not lend in MN. Keep searching. We can't be the only one out there with this product. Good Luck to you. ~ Bert Carpenter, The LoansA2z team of NOVA Home Loans ~ NMLS 40586 ~ Certified by the National Association of Mortgage Professionals and Licensed in California and Arizona ~ 888-889-9950

Mar 31st 2013
David Kosmecki (David_Kosmecki)
#38 ranked lender in Minnesota - 256 contributions

Based upon my 35 years in the industry, a heloc is not likely. You are just coming timewise to qualify for a 1st mortgage.

Mar 31st 2013
Steve Justice (sjusti_716_763)
#29 ranked lender in Minnesota - 3 contributions

Presently none of the large banks will give you a heloc if they can find anything derogatory, no matter how long ago it happend. What you might do is reconsider talking to your credit union, offer them the chance to put a lien on your new home as long as it is a line of credit sufficient enough to consolidate your credit cards as well as their balance.

Apr 1st 2013
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