The Federal Housing Administration has trimmed the waiting period for borrowers who experienced foreclosure, allowing people who went through bankruptcy, foreclosure, deed-in-lieu or short sale to re-enter the market in as little as one year, according to the Consumer Credit Counseling Services of Partnership for Families, Children and Adults.
To make consumers aware of these changes, Consumer Credit Counseling Services will offer a required eight-hour pre-purchase class starting Thursday, Sept. 12, and continuing through Thursday, Oct. 3. Classes will meet from 6 to 8 p.m.
Topics to be covered include:
• Previously, borrowers who experienced foreclosure waited at least three years before getting a chance to be approved for an FHA loan. With the new guidelines, certain borrowers who lost their home as a result of an economic hardship may be considered earlier.
• For borrowers who went through a recession-related financial event, FHA now states "their credit histories may not fully reflect their true ability or propensity to repay a mortgage."
• In order to be eligible for this more lenient approval process, provided documents must show credit impairments were from loss of employment or loss of income beyond their control. The lender also needs to verify the income loss was at least 20 percent for a period lasting at least six months.
• According to the FHA, recovery from an economic event involves re-establishing satisfactory credit for at least 12 months. Criteria for satisfactory credit includes 12 months of good payment history on mortgage, rent or credit accounts.
• Borrowers must demonstrate they have fully recovered from the event that caused the hardship and complete housing counseling.
• The new guidance is for case numbers assigned on or after Aug. 15 of this year, effective through Sept. 30, 2016.
For help or to learn more, call 423-490-5620 or 1-800-459-2227, or check the website at www.CreditHelpToday.org
Get breaking news from the Times Free Press on Twitter at www.twitter.com/timesfreepress or by visiting us on Facebook or Twitter at the right:
related articles »
The number of Chattanoogans going broke or losing their properties to foreclosures declined last year, but Tennessee, Georgia and Alabama ...
The number of Chattanoogans going broke or losing their properties to foreclosure fell in the first half of 2011 as ...
Bankers are trying to reduce how much public notice is required before they can foreclose on homes, drawing fire from ...
A letter comes in the mail, stacked on top of a pile of past-due bills.