As the amount of foreclosures increase across the country, lenders gear up for the new breed of home buyer. The requirements for obtaining a mortgage after one has been foreclosed on are tightening up. Whereas before, lenders would offer a mortgage four (4) years after one has been foreclosed upon, it  has been increased to 5-7 years from the date of deed transfer.

 

A few more requirements are:

• It can only be a primary residence (no second home or investment property)
• A minimum FICO score of 680 is required
• The borrower must have reestablished good credit (4 trade lines paid perfectly for 24 months)

There are many caveats and extenuating circumstances, so each person’s situation might be different. The point is that after a foreclosure, it is best to clean one’s credit up and go the straight and narrow. The banks will really be watching people now, rather than before when you get a mortgage ONE day out of foreclosure.  Oh, and the program is now called “financial mismanagement” mortgages. Isn’t that like the pot calling the kettle black?

Dale Siegel