Would FHA consider this a foreclosure?

[Teggie]

What is the name of your state? Texas

I have a question please?

I have been looking into the possibilty of qualifying for a FHA or FHA type program. However reviewing thier list of requirments I am afraid I may not qualify.

I purchased a used mobile home in 2001 and parked it in a park. It was never finaced with land nor was it permantly affixed to a property. On my yearly taxes it was listed as a personal property. In May 2004 things got really bad and I called the company 21st Century Mortgage and asked to work something out, they refused and said if I didn't pay XXX by such as such date they would repossess it. I moved out a week later because I couldn't pay the funds. One month later they hauled it away. 4 monthes later I received a cancellation of debt saying the mobile home was sold for what was owed on it and have heard nothing else from them.

I pulled my credit reports in January, 21st Century Mortgage was listed on 2 of them, one showed a repossession with a past due balance and one showed as a repossession/foreclosure. I disputed both CRA's because there was no balance (I received a cancellation of debt) and to my knowledge I was not foreclosed on (I never was served any papers). One CRA deleted it 2 weeks later, the other is very slow and has done nothing at all.

I am afraid that FHA will refuse me because it is still present on a credit report as a repossesion and they will consider it a foreclosure because the loan was held by 21st Century Mortgage.

I have been researching and it is appearing to me that I may have had a Chattel loan? If so, would a repossession of a personal property even if you lived in it still be considered a foreclosure?

The FHA site says no foreclosure in 3 years, it doesn't mention reposessions.

Can anyone clarify this for me please? If you have any links to sites to prove this please provide as I have been in contact with a broker and this is the only issue standing in my way.

Thank you,
Teggie

 

[lcannister]

If you have any links to sites to prove this please provide as I have been in contact with a broker and this is the only issue standing in my way.

Thank you,
Teggie

So what does the broker say? If he/she can not answer this question for you find another broker quick!

 

[Teggie]

Sorry I should have clarified better, it isn't a broker I have been talking to, it's an actual lender I found linked through a search of FHA's site of "FHA lenders". I have been thinking about a FHA mortgage and they have been trying to see what I could be eligible for.

I found this researching the web:

"Consumers who finance their homes with a personal property loan (also called a chattel mortgage) do not have foreclosure protection like those available for real property home mortgages. When the customer or borrower defaults on a loan, the home can be repossessed like a car."

I have to wonder, if I did not have foreclosure protection as evidenced by thier fast repossession with no serving of papers, then why would this be considered a mortgage foreclosure in the eyes of FHA?

This is why I am asking if this would be considered a "foreclosure" per FHA standards or a repossession?

Thanks,
Teggie

 

[lcannister]

This is why I am asking if this would be considered a "foreclosure" per FHA standards or a repossession?

Thanks,
Teggie

Okay then what is THIS PARTICULAR LENDER saying concerning this matter?

 

[lcannister]

I am trying here, the one report where it is listed as a repo IS correctly reported and you may not get that removed for some time yet. I suspect the other might even reappear with the correct info.

What is the rest of your credit like? Were you ever late on the payments up to the month of repo?

FHA Loan Credit Issues
Before approving a loan, FHA.com analyzes the integrity of the borrower's past credit performance. Those who have a good credit history demonstrated by a solid track record of timely payments will likely be eligible for a loan. Potential borrower's whose credit history is marred by slow payments, poor financial judgment and delinquent accounts is not a good candidate for loan approval.


Maybe if I at least keep bouncing it to the top someone will have a direct reply for you

 

[Teggie]

It does show as as reposession on the one report. It is reporting a balance which I disputed as untrue because I had received the cancellation of debt. This particular lender that I have been speaking with said they were afraid it would not pass because the entry is listed by 21st century mortgage and since it was a residence that it would be veiwed as a foreclosure.

I was late two monthes before the repo.

This is my only bad entry in the past 3 years. I have good factors other than this, good income, 0 utilization.


Thanks,
Teggie

 

[lcannister]

I have a friend in the Loan biz, I will copy your post and see if I can get you a direct answer!

 

[Teggie]

Thank you! It is much appreciated!

Teggie

 

[lcannister]

His advice:

Go to the clerk and recorder and see if a foreclosure or notice of default is recorded. If yes, you have a foreclosure; if not you don't.

Also if the credit report is showing that the payment was 120 delinquent, even though it was chattel, it was housing and that is considered a foreclosure if you owned and not if you rented. (on rent, after 24 months of good housing history you are ok)

I hope this gives you a place to start.

Good luck.

 

[Teggie]

That is very good to know, tell your friend thank you for me!

This is how it shows on my report:
**********************************************************
21st Century Mortgae

Acct #: XXXXXX

Condition: Deragatory

Balance: 37,000 (Incorrect)

Past due: 3,000 (Incorrect)

Pay Status: Reposession

High Balance: 37,000

Balance and Limit 439.00

Opened: 11/03

Reported: 12/04

Responsibility: Individual

Remarks: Involuntary Repossession

It lists one 30 day late in 5/04 and a 60 day late in June 04

*************************************************************

Quote:
"Also if the credit report is showing that the payment was 120 delinquent, even though it was chattel, it was housing and that is considered a foreclosure if you owned and not if you rented. (on rent, after 24 months of good housing history you are ok)"

I hope I am understanding this correctly, is the 120 delinquent referring to days late? If so then it would be no in my case, there is only 1 -30 and 1 -60 day late. It is blank before and after those dates.

I did own the mobile home, was buying it at the time of default, I rented a place in July 2004 after I left the mobile home and have paid perfect rent since then and now. Never late on my rent here. I have been renting here for a total of 2 years and 8 monthes.

I will contact the courthouse in the city where I lived then and see if any records are recorded for me.

I wonder if a letter from my landlord stating perfect payment for 2 years and 8 monthes be appropiate?

Just afraid that even if the mobile home is listed as a reposession it will still cause my app to be denied.

Thank you!
Teggie

 

[Teggie]

Luckily the county I used to live in is online friendly. I went there this afternoon. I was able to search documents and nothing returned under my name whatsoever. No property records, abandonment, foreclosure nothing at all.

Teggie

 

[lcannister]

If it were me I would find a good broker and discuss these issues with him/her. A good one will be able to tell you right away if there is a serious issue. Next alternative apply and see what happens!

Good luck, but call the courty house Monday and make sure, the website might not be up to date.

I question a lender who can not pretty much answer your questions though.

 

[Teggie]

Thank you for all your help, it is much appreciated. I will call the county record department Monday to doublecheck on this, I am hopeful since this occurred in 2004.

I beleive I will also write a letter of explanation for this debt, I have found a few websites that say this could be beneficial in my case. My husband had major back and neck surgery a couple of monthes before the default and that was a precipitating reason it occurred, because he was unable to work, we had small children that required daycare and I made 1750 a month less than I make now. I am a critical care nurse now and it pays much better than a staff nurse position. I make now the equivalent of what we both did in 2004 Which is good for us because the surgery has left him unable to return to that line of work. And I can get a job easily in this field if something happens to my current position. I have reserves now and 0 debt. Nothing is holding up my app except this one debt that is not 3 years old until 12/07.

I understand your recommendation about the broker. I had initially contacted one, he was a fast talker, he quoted me interest rates of 9-10%, didn't seem to think FHA would be viable for me and the estimated monthly payments were going to be more than I was comfortable with. He wanted me to app and let them pull my credit but I declined. That was when I went to the FHA site and got the name of the lender I have been corresponding with.

So at this point I may see if the app will fly, if it doesn't I will prob try to find a broker I can feel comfortable with. Acck, they scare me! Or I may just wait till this debt either deletes off my report or reaches 3 yrs of age in 12/07 according to the date of last activity.

Now I wonder if a FHA denial will lock me out of reapplying later on?

Thank you very much!
Teggie

 

[Teggie]

Update! yay!

My situation was sent over to a credit agency the lender works with. She set up a conference call with the finance company the repo was through.

The date of last activity will be 7/04 instead of 12/04.
The debt was cancelled and will be updated to a 0 balance.
It is a paid repo not a foreclosure (yes!)

However FHA can still be funny bout those since it was a residence, I sent in a Letter of Explanation which they liked and will use. I called the courthouse today and no records are in my name.

The lender has asked me to submit all docs (paystubs, W2's etc etc) they think it will be approved. At very worst FHA may approve it with the condition I can't close till after 07/07 when the repo is 3 years old. No prob since I haven't even started looking yet.

I feel pretty good as before I was told they would not ask for docs unless it was pretty clear the loan would prob be approved.

Now my scanner is emitting smoke from all the docs I am scanning.

Thank you!
Teggie