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Mortgage after foreclosure. Mortgage after bankruptcy. Mortgage after a short sale.
Waiting periods REQUIRED before getting a NEW mortgage loan in MN, WI, SD

* NOTE: Fannie Mae and Freddie Mac do not do loans.  They BUY finished loans from lenders after closing. FHA, VA, and USDA also do not do loans. They issue insurance on loans. Mortgage lender may, and often do, add their own overlays or restrictions to what Fannie Mae, Freddie Mac, FHA, VA, or USDA guidelines say they may buy or insure.

Just because you may meet the guidelines listed below, DOES NOT mean any lender will actually approve a loan for you.

Contact us at (651) 552-3681 or APPLY ONLINE for a personal review of your new loan options for homes in MN, WI, or SD

 Current as of June 12, 2015

 New CONVENTIONAL  Loans (determined by date of application)

Derogatory Item

Waiting Period

Foreclosure

Home given back to the bank – No owner participation

         7 years from date foreclosure completed and transferred back to bank – No extenuating circumstances *

         Extenuating circumstances - 3 years from date foreclosure completed and transferred back to bank with 10% down.  Primary home purchase and rate and term refinance only. No second homes or investments. Qualifying extenuating circumstances are death or well documented extended illness.

Short Sale

Deed in Lieu of Foreclosure

 

New rule - started August 16. 2014

Short Sale = Home sold but sales price less than owned

Deed in Lieu = Home returned to lender in exchange for forgiving loan

         4 years from date sale closed and transferred to a new owner or transferred back to bank

Bankruptcy – Chapter 7

Debts are discharged through BK, client does not pay any debts owing

         4 years from discharge date

         2 years from discharge date possible with extenuating circumstances *

Bankruptcy – Chapter 13

Debts are paid back on a monthly scheduled payment plan

         2 years from discharge date

         4 years from dismissal date

Bankruptcy AND Foreclosure

House INCLUDED in bankruptcy

New rule - started August 16, 2014

Bankruptcy AND foreclosure, with home foreclosed on included in bankruptcy. Waiting period is based on bankruptcy discharge date, not foreclosure date, regardless of how long after the bankruptcy the official foreclosure occurred. Fannie Mae only

 

New FHA Loan (determined by date of application)

Derogatory Item

Waiting Period

Foreclosure

Deed in Lieu of Foreclosure

Home given back to the bank – No owner participation

Deed in Lieu = Home returned to lender in exchange for forgiving loan

         3 years from date foreclosure completed and transferred back to bank

         Less than 2 years, but more than 12 months from date foreclosure completed and transferred back to bank may be acceptable if the result of acceptable extenuating circumstances *

Short Sale

 

Short Sale = Home sold but sales price less than owned

         3 years from date sale closed and transferred to new owner

         NO waiting period if borrower had no late payments on any mortgages and consumer debts within the 12 month period proceeding short sale AND did NOT do a strategic short-sale. Job loss and relocation outside of area are examples of short-sale NOT being strategic.

Bankruptcy – Chapter 7

Debts are discharged through BK, client does not pay any debts owing

         2 years from date of discharge with re-established credit paid as agreed or no new credit obligations incurred

         LESS than 2 years, but more than 12 months from date of discharge may be acceptable if the bankruptcy was caused by acceptable extenuating circumstances * AND borrower has since exhibited a documented ability to manage financial affairs in a responsible manner.

Bankruptcy – Chapter 13

Debts are paid back on a scheduled repayment plan

         1 years of on time payments under bankruptcy has elapsed and the borrower’s payment performance has been satisfactory (on time) or bankruptcy discharged 1-yr

New VA Loan (determined by date of credit approval)

Derogatory Item

Waiting Period

Foreclosure

Deed in Lieu of Foreclosure

Home given back to the bank – No owner participation

Deed in Lieu = Home returned to lender in exchange for forgiving loan

         2 years from date foreclosure completed and transferred back to bank

         1 – 2 years from date foreclosure completed and transferred back to bank IF credit re-established and paid as agreed AND was caused by extenuating circumstances *

Short Sale

 

Short Sale = Home sold but sales price less than owned

         2 years from date sale closed and transferred to new owner

         NO waiting period if borrower had no late payments on any mortgages and consumer debts within the 12 month period proceeding short sale AND did NOT do a strategic short-sale

Bankruptcy – Chapter 7

Debts are discharged through Bankruptcy. client does not pay any debts owing

         2 years from date of discharge with re-established credit paid as agreed or no new credit obligations incurred

         1 – 2 years from date of discharge may be acceptable if the bankruptcy was caused by acceptable extenuating circumstances * AND borrower has since exhibited a documented ability to manage financial affairs in a responsible manner.

Bankruptcy – Chapter 13

Debts are paid back on a monthly scheduled payment plan

         1 years of on time payments under bankruptcy has elapsed and the borrower’s payment performance has been satisfactory (on time)

 New USDA Loan (determined by date of credit approval)

Derogatory Item

Waiting Period

Foreclosure

Deed in Lieu of Foreclosure

Short Sale

 

Home given back to the bank – No owner participation

Deed in Lieu = Home returned to lender in exchange for forgiving loan

Short Sale = Home sold but sales price less than owned

         3  years from date foreclosure completed and transferred back to bank

         Less than 3 years from date foreclosure completed and transferred back to bank IF credit re-established and paid as agreed AND was caused by extenuating circumstances *

Bankruptcy – Chapter 7

Debts are discharged through Bankruptcy, client does not pay any debts owing

         3 years from date of discharge with re-established credit paid as agreed or no new credit obligations incurred

         Less than 2 years from date of discharge may be acceptable if the bankruptcy was caused by acceptable extenuating circumstances * AND borrower has since exhibited a documented ability to manage financial affairs in a responsible manner.

Bankruptcy – Chapter 13

Debts are paid back on a monthly scheduled payment plan

         1 years of on time payments under bankruptcy has elapsed and the borrower’s payment performance has been satisfactory (on time)

         Less than 1 years from date of discharge may be acceptable if the bankruptcy was caused by acceptable extenuating circumstances AND borrower has since exhibited a documented ability to manage financial affairs in a responsible manner.

*Granting of extenuating circumstances exception is VERY RARE, and almost never happens

EXAMPLE OF EXTENUATING CIRCUMSTANCES for a new mortgage loan

         CONVENTIONAL Loans:  Non-recurring events that are beyond the borrower’s control that resulted in a sudden, significant, and prolonged reduction in income or a catastrophic increase in financial obligations. Death of primary wage earner. Loss of job, and divorce do not qualify.

         FHA Loans: Serious illness or death or death of a wage earner. Divorce and the inability to sell a property due to job transfer or relocation to another are DOES NOT QUALIFY as an acceptable extenuating circumstances

         VA Loans: Unemployment, prolonged strikes, medical bills not covered by insurance, etc. Divorce is NOT viewed as beyond the control of the borrower and/or spouse

         USDA Loans: Loss of job, delay or reduction in government benefits or other loss of income, increased expenses due to illness, death, etc. Circumstances surrounding the adverse event must have been temporary in nature AND beyond the applicants control AND the reoccurrence in unlikely to occur again

 

  Equal Housing Lender

Policies, Procedures, Disclaimers

33 Wentworth Ave E - Suite 290
St Paul, MN 55118

(651) 552-3681  

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Our services available only for properties located in Minnesota, Wisconsin, and South Dakota. Licensed as Mortgages Unlimited, Inc. NMLS # 225504. Joe Metzler NMLS # 274132. As a Lenders One partner, we are part of the 3rd Largest Retail Mortgage Originators in the country. We are consistently ranked as one of the top mortgage lenders in Minnesota by Minneapolis St Paul Business Journal. Any use or duplication of any materials is strictly prohibited.  All images, text, and materials © 1998 - 2017 Joe Metzler. This is the private web site of Joe Metzler, NMLS #274132. All Rights Reserved.