You are eligible to purchase on a government loan, 3 years after the date of
- sherrif sale
- discharge date if included in a bankruptcy
- date of sale if short sale
Please beware and make sure if you are 1-2 years out you are checking and watching your credit to make sure that the below scenario does not happen to you.
You are also eligible for first time home buyer status where you may be approved for down payment assistance.
Today my client was beginning a mortgage pre-approval to purchase a new home. Due to husband’s loss of job in 2007 they lost their home to foreclosure. I was confident after my initial conversation that they would have no problem approving for a new loan. The sheriff sale was over 3 years ago. Both buyers have stable full time employment for the past 2 years. They had paid off a Mercedes lease 2 months ago and over $65,000 in credit cards, student loans, and unsecured debt in the past 24 months. There had been no late payments or collections in the past 3 years.
Unfortunately there was a surprise. Even though the home had foreclosed in 2007, EMC mortgage corporation still reflects they owe $129,000 on a home equity lien. EMC is reporting them late every month for the past 3 years. My client immediately called EMC and was told they still owe $129,000. The only solution will be hiring an attorney. Their credit is further damaged beyond the damage incurred by the initial foreclosure They should have over 700 credit scores after significant payoff of all debts and time elapsed, however their score is 576 today. We cannot help them purchase at this time until they agree to get EMC to settle, write off debt, or they pay it off.