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Why is it so difficult to buy a house after foreclosure and/or bankruptcy?

I had to file bankruptcy two years ago due to a family medical sitution.  All my debts including the house which I did not reaffirm were discharged in 2011.  The house is just being foreclosed now.  I guess they had to go through the process even though I feel I gave up the house when I did not reaffirm the mortgage.  Anyway, it will be sold soon.  I am looking to rent because no one will give me a mortgage.  It's ridiculous on how long you have to wait for this or that before you can qualify again.  I did what I had to do for my family.  Now I'm debt free, I've put money away and I want to purchase a small house for my mom and me but I can't.  I've filled out many many applications and everything comes back so sorry.  I am in a better position financially than I have been for years and yet I can't get a $60,000-$70,000 loan for a home.  I even have the 20% down.  I would gladly buy on a land contract.  Since many of these foreclosed homes are owned by the respective bank that foreclosed, why don't they give a loan to someone else to buy it and they can get some of their money back.  It just doesn't make any sense to me.  I just checked my credit the other day and it's 632 average, I mean that's not terrible.  I just don't get it.  Thank you for your time.
  • March 12 2013 - Town of Delavan
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Answers (2)

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  • May 03 2013
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One simple reason. You have had a foreclosure and would be a high risk borrower. Banks aren't going to be willing to jump back in until sufficient time has passed - 2 years, but only if you have 20% down. Plus, a much higher credit score than 632. This score isn't at the minimum that most lenders require for someone who hasn't had a foreclosure. A land contract could be a decent option, or simply rent until your 2 years have passed - this means 2 years from The Date that the title to the property is deeded out of your name, which apparently has not occurred yet.
  • March 12 2013
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