VA Home Loan, 2yrs post bancrupcy, Home included in discharge but not foreclosed on by lender.
I have a very unique situation on a VA loan that I am currently trying to get and in doing my research I came this your website and it seems many people are very knowledgeable on the subject, so I was wondering if you all could help or at least point me in the right direction. I am a Veteran (currently serving) and had to claim bankruptcy due to a PCS and inability to sell my residence in Toledo Ohio. It has now been over 2 years since my bankruptcy discharge which included the home near my previous duty station. After my bankruptcy the mortgage company (GMAC) chose not to foreclose on the home, stating that they are not in the home management business, therefore the house is still titled in my name although I have no financial liability. Currently I am attempting to purchase a home near Columbus Ohio. I have spoken in depth to the underwriting staff at the VA regional center and meet all applicable criteria for VA loan eligibility even with the house entitlement. I have worked with multiple lenders who have claimed that they can do the loan no problem, however when they approach the secondary market with the loan it has been rejected every time because the house is still titled to me. I have an approved/eligible on automated underwriting, excellent debt to income, steady employment, clear CAIVERS and a 687 middle score. Have anyone previously experienced this situation? Does anyone know of any secondary market mortgage investors that will accept the loan with the title still in my name? Can someone recommend anything that may keep me from having to wait an additional 3 years post transfer of title to own my own home? by SFC Crye from columbus, Ohio. May 13th 2013
Kimberly Lawson (kilawson)
#54 ranked lender in Ohio - 150 contributions
Hi,You could possibly find someone who is lending their own funds and servicing their own loans. VA can reinstate funds as a one time curteousy if you still own the home or if a home is still covered by VA. They really aren't taking full risk and responsibility for the new home loan. My underwriters, I could hear their response: the home loan was included in a BK and hence if it's not paid if it's not reaffirmed with verified payemnts, it'll still be treated as a foreclosure regardless it's current status. For all intense and purposes: you have walked away from real estate. It's just the formalities of transferring the deed out of your name that hasn't taken place. Personally I would demand due process or get a real estate attny involved. At some point you're going to want this resolved. It will follow you for a very long time especially where mortgage financing is concerned. Your time clocks won't start officially counting until after the deed transfers out of your name. The matter could report on your credit (once resolved) for up to 7-10 years after that. The longer the matter sits stagnant the longer down the road it will be still be something you continually have to address.Best wishes to you for speedy resolution and for you to find someone as the others and I have stated.Kim LawsonLicensed Ohio Mortgage Loan OriginatorLicensing and contact information is locate in my profile.
William J Acres (William_Acres)
#74 ranked lender in Arizona - 8,728 contributions
Unfortunately, you wont have any success even by dealing with a direct seller. The direct seller lenders will still have their own set of rules, and foreclosure/BK are the most severe types of derogatory credit you can have,... it's unlikely they would allow it.. Also, even though DU has given you an approved/eligible, it's very possible that the foreclosure was inputted incorrectly, or the software is reading it wrong, but either scenario could change your approval to a denial. and underwriting guidelines are very clear.. you must wait 2 years for VA, 3 years FHA, and it goes by the date the home is take out of your name... You can accelerate the process by doing a short sale. The lender would have to approve it, but at least you would know exactly when the home is changed ownership.. you could also do a Deed in Lieu of foreclosure.. meaning you sign the title over to them, they save money cause they wont have to foreclose.. (I would try the Deed in Lieu first)... however they cannot be forced into this, so if you call to inquire, be nice... I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. 480-287-5714 WilliamAcres.com
Joe Metzler (JoeMetzler)
#17 ranked lender in Minnesota - 4,843 contributions
Having a bankruptcy, and putting the home in the bankruptcy does release you of any financial responsibility of the home, but as you've found out, doesn't release you OF the home. If you continue to pay, you can continue to stay. If you chose not to pay, the house goes into a standard foreclosure to dispose of the house. The foreclosure will show up on your credit report. Your note doesn't say exactly why they are denying you, but my guess if that the house is being treated as a currently multiple late payment/foreclosure. It is slipping by automated underwriting because the bankruptcy prevents the payment history from showing on the credit report, but yet through the underwriting process they discovered the house history. My 22-year educated guess is you are denied until 3-years AFTER that house is no longer in your name (Sheriff sale date or sold date). www.VA-IRRRL-Loan-MN.com
Tim Howard (TimHoward)
#75 ranked lender in Ohio - 52 contributions
Typically it's 3 years from Sale date if there were foreclosure proceedings. I can run the scenario by our Underwriters and Secondary Manager for clarification. Give me a ring so that we can discuss the situation further. 513-307-9731 Tim
Lynn Bossi Kinsel (LynnKinsel)
#37 ranked lender in Virginia - 61 contributions
If you haven't already, I would recommend finding a lender that can sell your loan directly to GinnieMae (GNMA). This bypasses the secondary market and gives more flexibility in situations like yours. unfortunately we are not licensed in the state you are buying in.
Tim, Thats the problem .....there was no sale and no foreclosure proceedings, I just have a house in my name that I dont pay on and was included in the Bankruptcy discharge over 2 years ago. VA guidlines state that the CH 7 bankruptcy is the final action required to begin the 2 yr waiting period (VA PAM 26-7, CH4, 7e and 7f). I understand that VA is not a lender and that the lenders as well as the secondary markets place overlays on what they will accept and underwrite. What I dont understand is how having the house in my name is considered a "risk" when as far as I am concerned I could rent it out with no mortgage payment due... then turning it into an asset? I'll give you a call. Thanks!
Jeff Riley (JRILEY)
#0 ranked lender in Massachusetts - 17 contributions
Try the link below, I believe they are a GNMA Lender in Indianahttp://www.swmc.com/swmc/wholesale_lender/LA/Louisiana_wholesale_lending.php
Dave Metsker (DaveMetsker)
#35 ranked lender in Oregon - 2,318 contributions
I have a unique solution, not suggested by any other forum members. Contact me at 503-620-2239. Dave Metsker, primefinancial@frontier.com
Steven Cook (stcookmortgage@gmail.com)
#37 ranked lender in Washington - 256 contributions
Though we don't lend in Indiana -- based on your information, you might want to check with Winterwood Mortgage in Greenwood, IN Their phone is 317-888-1135. Ask if they are "Ginny Mae Direct". If they can't help you, that is the question you want to raise to any Local Mortgage company/officer you check with.
We have the same problem, tomorrow I will be going to the lender and requesting a Deed in Lieu of...we are not in foreclosure either and our lender has been less than helpful. I contacted the VA and was given the same information. We are not in WA we are now in KS and like you have worked and gotten our credit scores back up and are wanting to buy a home. When I posted on here most people said there was nothing we could do so this thread is much more helpful. It is very frustrating especially when you are doing what you are suppose to.
JMS, I would love to compare notes and see if we can get any closer to figuring out the "how" and "why" so that we may be able to find a reasonable solution that doesn't include, "sorry come back in 3 years" From my understanding thus far it is a HUD rule that states 3 years post transfer of title and the reason that is significant is that the secondary market lenders that are pooling the loans to create a tradable commodity through "Fannie" and "Freddie". What I have learned through this post that I previously did not know is that there is a third government back program., "Ginnie" and Ginnie Mae does the same thing as the other two but only consolidates government backed loans such as VA, FHA, and USDA. SO my speculation is, and someone correct me if I am wrong, that most secondary market investors use the "HUD" rule mentioned above when screening all of their loans so that they can select a pool of loans at random to include VA, USDA, and FHA as well as other conventional loans and then sell them to Fannie or Freddie at will. What has been mentioned by a few people here is to look for a Ginnie Direct Lender.....what this in essence does is increase the likelihood that our loan will be bundled with like type government backed loans and may not have the additional HUD overlays that have been emplaced by the investors such as the 3 year transfer rule. If we can find a Ginnie Direct lender that has NO OVERLAYs and accepts VA standards as written then we will be perfectly eligible. I have researched Ginnie Direct lenders that are licensed here in Ohio and found only one based out of Missouri that I sent my situation and Bankruptcy information to; I am currently working with that agent to see if they can assist but they are asking a lot of questions about the bankruptcy itself so far. I have been researching online to try and find two different things that I have yet to find, the first being the regulation governing "HUD" that states the 3 year rule so I can ensure that it is in fact applicable in all instances, and the second being the "Ginnie" guidelines to see if much like Fannie and Freddie that all of the HUD rules superseded anything published or accepted by VA. My problem is not at all with the VA underwriters at the regional center, I have spoke with multiple agents who have stated that if I find a lender that will guarantee acceptance solely based on them backing the loan that they would underwrite the loan in house rather than have the lenders VA Auth Rep do it. My next steps are more than likely two fold #1 I plan on contacting HUD representatives who can directly answer the questions I have posed above, I will most likely send an email to someone at a national level rather than calling the local HUD office, this way when they send the question down to the local field office asking them to assist me it creates the sense of urgency I need right now, and #2 Now that I understand that my problem may arise from restrictions imposed by a government entity I plan on contacting my local congressional representative to present my story. You are the third person counting myself that I have found in the exact same situation and I would venture to say that in today's housing market it is more common than the public is aware of that the mortgage companies are not foreclosing on the homes, as my servicing company told me, "they are not in the home management business they are in the mortgage business" I would love to trade contact information so that when presenting to my political representatives I can show that it is not just an isolated instance. Please anyone on here chime in and correct where I may be mistaken on the processes, where to go next, or where to research this more. Thank you ato everyone on here for the help you have given so far!
It is extremely frustrating. Today I called my lender about a Deed in Lieu..got no where so I went to one of their offices and actually got someone to look into things for me, and she actually called me back..I was surprised. She told me the same that it is HUD who has dictated the waiting period and that it is only 2 years not 3 or 4 like others have said but both she and the VA have said that it is specific to each the lender. She gave me the number to the HUD office where our house is located at, she suggested that we try dealing directly with them and see if they can help us, I called and left a message so we shall see. I also talked to my BK attorney and he told me that banks wont tell you they don't want it on the their books in certain quarters...he also said my lender is the worst. I will let you know what I find out from HUD.
According to this which is taken directly from the HUD website we are eligible for a loan 2 years after the discharge of the bankruptcy...which is not what people are saying on here:http://portalapps.hud.gov/FHAFAQ/controllerServlet?method=showPopup&faqId=1-6KT-188Can anyone on here help clear this up?
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