Slowly but surely, they are figuring out that the underwriting guidelines are too restrictive, but they aren’t going far enough. There are hundreds of thousands of potential home buyers on the sidelines, that want to buy or refinance, but can’t because of over restrictions.
I meet with clients that were referred to me recently. They had to file bankruptcy in 2008. They were paying two mortgages, when he lost his job, because his company went out of business. He was a highly paid executive, so finding a job was not easy to find. He was making $100,000 per year and eventually accepted another job for half the pay. With his new income, they just couldn’t keep up with the two mortgages,
They filed for bankruptcy, moved out of their home and rented a smaller home, which they have been in for nearly three years. So, what is the problem, right?
The problem is, that even though the original mortgages were included in the bankruptcy, the home is still in the foreclosure process. You would think this can’t happen, well it actually happens a lot. There are tens of thousands of folks in the same boat. Most of them want to be homeowners again, but can’t.
FHA guidelines say, that someone can apply for a mortgage 24 months after a bankruptcy discharge, have re-established credit and 36 months after the completion for the foreclosure or short sale. For these clients, they can’t become a homeowner until 36 months after the completion of the foreclosure. They have attempted to find out what is going one, no one can tell them anything.
So far there is no light at the end of this tunnel for all those in this situation. It is time for these regulations to correct this problem, as these folks want to be homeowners again, but can’t.
There are literally millions of folk that want to be homeowners, but because of underwriting guidelines, can’t buy a home and would make outstanding neighbors.
Check out this article for the guideline changes:
By KAREN DEIS