Heads up to all who bought a home and left your wife or husband off of the mortgage that was foreclosed upon. Buying a home with the other's credit will be a thing of the past very soon. New regulations will require the lenders to deny a home mortgage to anyone who has deducted interest on a mortgage from their tax returns on a mortgage that has been foreclosed upon.

Simply put, if you filed your taxes jointly but the mortgage was in one borrower's name the other will still be penalized for the foreclosure. The penalty is that for a conventional loan a borrower must wait 4 years before they can qualify for a home loan. For FHA, it is a 3 year wait. Right now, if one person was on the loan that would only apply to them. Now it applies to anyone who profited from the deduction of the interest on that mortgage. How do we find this out?

Well, a form filled out called a 4506-t gives the lender a transcript of your taxes. This form is required to be signed for any home loan that you may apply for. In the transcripts it will point out that taxes were filed jointly. The lender must then question and document the closing of the claimed mortgage. If it is a foreclosure then the borrower will be denied, even if they personally do not have the foreclosure on their credit report. This prevents couples from purchasing another home before the penalty time has transpired. As a rule it is now going to apply to both husband and wife, if they have filed taxes jointly and received deductions or returns on the interest paid on any foreclosed mortgage within the last 3 to 4 years they will have to wait the penalty time to buy a home.