Thursday, November 18, 2010

Conventional Guideline Change for Borrowers with Prior Foreclosures

• With this change, the 5 year waiting period has been eliminated. Applicants with a prior foreclosure will only have the option of waiting 7 years from the completion date the foreclosure action as reported on the credit report or other foreclosure documents presented by the borrower with no additional minimum down payment, minimum credit score, or occupancy requirements.
• The 3 year waiting period since completion of a foreclosure is still available for loans with documented acceptable extenuating circumstances, but will now have a maximum LTV ratio of lesser of 90% or the maximum LTV ratio available for the product.
Previous guidelines allowed for an applicant to have a foreclosure within the last 5 years with requirements (e.g. minimum down payment, minimum credit score, and occupancy requirements) or 7 years with no requirements.