A reader asks, “I was a cosigner on a FHA loan in 2007 and my ex-boyfriend let the home go into a foreclosure process, the home was paid in full before it was foreclosed. it has been a year that the home has been paid off. Will I still be able to qualify for a FHA loan now? My credit score is good and I have all bills paid up to date including credit cards.”
This is a situation that may or may not have applicable FHA loan requirements depending on the circumstances of the foreclosure. Since the reader indicates that the foreclosure didn’t actually happen, there may be a gray area that’s not fully addressed by FHA loan rules.
However, lender standards may play a big part in whether a new loan could be approved in such cases. Is the lender willing to work with the borrower in these circumstances? That is likely the big question in cases like these.
That’s one reason why it may be best to build in some extra time to shop around for the right lender–when a borrower has a more complex set of circumstances that can affect the FHA loan application, some additional conversation time may be required with a lender to see what’s possible.
The first lender you speak to may not be able to help depending on the rules of that financial institution. But you may find one flexible enough to work with again, depending on circumstances.
It’s always important to keep in mind that FHA loan rules can’t force a lender to issue a loan when the applicant is on the margins of what the financial institution is willing to take a risk on. As long as a lender’s approval or denial of the FHA loan application (or any home loan application, for that matter) complies with federal Fair Housing Laws, the approval or denial of a new loan from an applicant may not what what’s consider to be “ideal circumstances” may depend on what’s been done in the past with that lender.
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