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Condition
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Wait Period
Only If Extenuating Circumstances Exist
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Standard Wait
Period for Financial Mismanagement
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Chapter 7 or 11
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2 years, measured from discharge
or dismissal date.
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4 years, measured from discharge
or dismissal date.
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Chapter 13
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2 years, from discharge or
dismissal date.
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* 2 years, from discharge date
OR
4 years from the dismissal
date.
*The shorter wait period for
discharge date recognizes that borrower has already met a portion of wait period
due to successful completion of the Chapter 13 plan. A borrower who was unable to complete the
Chapter 13 plan and received a dismissal will be held to a four-year waiting
period.
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Multiple Bankruptcy Filings
Within the Last 7 Years
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3 years or greater, measured
from the most recent discharge date or dismissal date,
AND
There is evidence the most
recent BK filing was a result of extenuating
circumstances.
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5 years or greater, measured
from the most recent discharge date or dismissal date.
Note: The presence of multiple bankruptcies in the borrower’s
credit history is evidence of significant derogatory credit and increases the
likelihood of future default. Two or more borrowers with individual bankruptcies
are not cumulative, and do not constitute multiple bankruptcies. For example, if
the borrower has one bankruptcy and the co-borrower has one bankruptcy this is
not considered a multiple bankruptcy.
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Foreclosure
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3 years, measured from
completion date of foreclosure action as defined for standard wait period. The following additional requirements apply
between 3 and 7 years, which include:
DU
Loans:
Maximum LTV, CLTV, or HCLTV
limits are the lesser of 90% or the maximum LTV, CLTV, or HCLTV limits for the
transaction per Eligibility Matrix or Plaza program summary.
• Purchase - Primary Residence
only.
• Limited cash-out refinances –
Primary, 2nd Home and Investment eligible if program and DU allow at
time loan is underwritten.
|
7 years, measured from
completion date of foreclosure action as reported on the credit report or other
foreclosure documents provided by borrower.
Note: The purchase of second homes or investment properties and
cash-out refinances (any occupancy type) are not permitted until a seven-year
waiting period has elapsed.
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Deed-in-Lieu of Foreclosure and Pre-foreclosure/ short
sale
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DU: 2 years — 90%
maximum LTV/HCLTV
LP: 90% max
LTV
2 years from completion date on
owner occupied purchase or non-cashout refinance only
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• 2 years — 80% maximum
LTV
• 4 years — 90% maximum
LTV
• 7 years — LTV max per
Eligibility Matrix
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*The maximum LTV ratios permitted are the lesser of the LTV
ratios in the above table or the maximum LTV ratios for the transaction per the
Eligibility Matrix.
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Exceptions for Extenuating
Circumstances
A two-year waiting period is permitted if extenuating
circumstances can be documented, with maximum LTV ratios of the lesser of 90% or
the maximum LTV ratios for the transaction per the Eligibility Matrix.
Note: References
to LTV limits include LTV, CLTV and HCLTV limits.
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Underwriter’s Written
Analysis
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Underwriter elects to use Extenuating Circumstances.
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Must be a complete analysis fully detailing that the
application has re-established an acceptable credit history.
May be documented on the Transmittal FNMA Form
1008.
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Requirements for Re-Establishing
Credit
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Requirements for Re-establishing
Credit
After a bankruptcy, foreclosure,
deed-in-lieu of foreclosure, or pre-foreclosure sale, the borrower’s credit will
be considered re-established if all of the following are
met:
·
The waiting period and the
related additional requirements are met.
·
The loan receives an
Approve/Eligible or LP Accept and meets minimum credit score requirements.
·
The borrower meets minimum
trade-line requirements per program summary.
·
Non-traditional credit is not
acceptable for meeting re-established credit requirements after major
derogatory.
Additional Requirements:
·
All existing credit
obligations must be current at the time of the
application.
·
No more than 2 x 30 day late
payments on installment and/or revolving accounts in the most recent 24
months.
·
No 60 day late payments on any
allowed on any installment and/or revolving debt during the derogatory event
waiting period.
·
No past due housing payments
during the derogatory event waiting period.
·
No new public records for
Bankruptcies, Judgments or Collections allowed during the derogatory event
waiting period.
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Joel Lobb (NMLS#57916)
Senior Loan Officer
502-905-3708 cell
502-813-2795 fax
jlobb@keyfinllc.com
Key Financial Mortgage Co. (NMLS #1800)*
107 South Hurstbourne Parkway*
Louisville, KY 40222*
http://mylouisvillekentuckymortgage.com