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Now my lender is telling me I don't have the cleanest file?

I tried to get a conventional loan and was turned down.  My all around FICO is 687.  I had a house, I was served with forclosure papers on April 1, 2009, the house closed on May 30, 2009, due to divorce.  I was told last Friday by lender that he was 95 percent sure that my FHA loan would go through.  I've already been put through automated underwriting, I submitted Divorce Judgment, paid for Insurance and submitted copies of checks from the sale of another home.  Now I'm told my file is not the Cleanest?????? 

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August 09 2013 - Chicago
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HUD is probably just having someone review the details of your loan to make sure that they will actually insure it, which is what your lender requires to close on the loan. HUD usually does this post closing, but since the underwriter on your file has gotten spooked, they're getting pre-clearance before they actually fund the loan.
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August 09 2013
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My LO will not answer... what does it mean to have HUD underwrite the Loan?  Are there additional costs?  My LO said 3 to 5 days?  I really don't know a thing about this...
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August 09 2013
The credit bureaus have a lot of catching up to do on how to accurately report foreclosure info. They lost a huge lawsuit regarding accurate reporting recently. I hope your sitch work itself out. You may want to take the credit report matters into your own hands. A threatening letter to the bureaus and the Lender that reported the FC info may help, but not immediately. Be sure to mention the $17 million that they will be paying for inaccurate reporting of one file.
What lender reported the foreclosure in 09?
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August 09 2013
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Thanks, I'm sick over this whole thing.  I sold my house on April 29th and finally found (I might add a property I owned in 1991).  My daughter is moving back to college on 8/18.  I really just want my home, unfortunately what it doesn't say on the credit report is that I had a contract on the house before it went into foreclosure but my estranged husband refused to sign the contract.  That is why I had the Judge write into the Divorce Judgment that she would sign if either party refused.  I also had written into the Judgment that all the creditor be paid.  Moral of this sorry nice guys finish last and divorce is the gift that keeps giving.  HOME SICK
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August 09 2013
I'm optimistic for you...sounds like a purely technical overreaction because of erroneous credit info (we've all seen plenty of that). UW sees foreclosure and is unwilling to sign off even though there's a mountain of evidence clearly explaining the mistake; hence, the escalation all the way up the ladder. 
Please let us know how this turns out...
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August 09 2013
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I guess this is my last hope.  I hope HUD approves

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August 09 2013
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@Brandon, I guess the problem is that I was served with Foreclosure papes on April 1, 2009 and Sold the house on May 30, 2009, that's over 4 years ago and it is listed on my credit as foreclosure started.  The house was not a Bank sale.
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August 09 2013
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New development, the loan is now going directly to HUD for underwriting.  to Lola, my home was not sold by the Bank I was served on April 1, 2009 I sold it on May 30, 2009, it was in foreclosure for exactly 2 months.  I have had consistentent employment for the last 3 years.

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August 09 2013
When was the home actually sold from the bank? Do you have 2 trade lines? Do you have any unemployment gaps larger than 6 months?
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August 09 2013
fshenberger, sorry to hear about your travails. Just wanted to comment on your better off going through bankruptcy, from a lenders standpoint, nothing is worse than a foreclosure. Bankruptcies are relatively easy to deal with from a lending standpoint. As soon as an underwriter sees foreclosure on a credit profile or AUS finding, their hair spontaneously bursts into flames and their eyes bleed. Even in cases where there was a net positive as an outcome like with you. 
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August 09 2013
Exactly. What things? Don't let this go on and on if they don't understand what to do after contacting FHA today.
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August 09 2013
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FHA Requirements 3 yrs on Foreclosures, funny thing is... My house was in foreclosure for 2 months, I rec'd full asking on the property and all my creditors were paid in full, with money left over.  Then I get a check from the LO about 3 months ago for wrongful foreclosure... can't understand this, would have been better with a bankruptcy, this sytem we have is really wrong.

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August 09 2013
Was the property foreclosed?  In many cases, and depending on the extenuating circumstances, it could take 7 years to fully recover and repair one's credit history to the point when one can qualify for another mortgage.

Per this article, "Mortgage giants Fannie Mae and Freddie Mac, for example, require defaulters to wait five years -- and have a minimum credit score of 680 and put 10% down -- before they can purchase a home again. If they don't meet that criteria the wait is seven years, at which point the foreclosure is expunged from a person's credit report."

Perhaps you can try to raise your credit score even more. MyFico.com has recommendations on how to improve credit score: tips to repair credit
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August 09 2013
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Just received an email, the underwriter has a call into FHA about a couple things and is awaiting FHA's call back.  My response what things?  LO didn't respond to that...
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August 09 2013
When a borrower has previous issues such as foreclosure, short sales, the documentation requested can get lengthy and complicated. However, it seems that you have a loan officer easily frazzled by details.
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August 09 2013
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I was approved through FHA automated underwriting
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August 09 2013
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I did ask my lender today, that was the answer I received, you know you don't have the cleanest file.  I have worked my entire life except for when I went through my divorce (lost my job) that is why the house went into foreclsoure, he wouldn't pay his 1/2 and my job was gone.  I have worked for the last three years, 2 years at a previous job and 1 year at this job.  I'm so stressed I cannot sleep.
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August 09 2013
Being told you do not have the cleanest file does not mean you are not approved.  Did your loan officer tell you that you were going to have problems get your loan approved by an underwriter?  If you ask for an explanation and see what else you are able to provide the loan officer to make this file a more cleaner crisp file prior to going to underwriting.
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August 09 2013

It's rare to see an exceptionally clean file-but so what? Your score qualifies and it seems like your waiting period after foreclosure is seasoned. The situation you describe is by no means unusual-we close files like this ALL the time. For real. FHA-you should be A-OK.

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August 09 2013
You should call your lender (LO) and ask what exactly is the problem. Ask if you have an Approved/Eligible from Desktop Underwriting? If so, then ask about any overlays the lender might have. 

Good Luck!
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August 09 2013
 
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