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Charles - question for you


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Charles -

You seem very knowledgeable - and boy, do I have a question for you!

My husband and I separated about 4 years ago. I left him in 1999 and the separation papers were filed in 2000. Per the separation agreement and finally the divorce, he was responsible for an auto loan and our mortgage - he defaulted on both. Car repo'd in 2000 and house sold at auction in dec 2000 and FHA paid a deficiency Feb 2001.

Now in 2003, I'm trying to buy a home. I have about 2 late pays on a credit card in the last year (the dates just slipped by me - payment is $12 and I usually overpay and avoid having a min payment due - missed it by a bit a few times, I guess!) A mortgage co ran a caiver on me and there's an FHA block on me until Feb 2004 due to the deficiency payment on the old mortgage. FHA says they don't remove a block but per section 41551.1 pg 2-9 it's up to the lender to qualify me for FHA. According to the loan officer I spoke to, I can't get qualified anywhere for a conventional loan.

So, I applied for some kind of state subsidized single parent loan she suggested. I'm waiting to hear whether or not I will get it. I wrote a letter of explanation regarding the mortgage and car defaults as well as the late pays. I have no collections and my scores run about 605 - 650 depending on the agency- broker pulled.

What I want to know is - if the state housing loan doesn't go through, is there an underwriter out there that will allow me to get an FHA loan based on the fact that it has been nearly 3 years. I had to provide my tax returns for the last 3 years to show that I haven't owned property and I have not claimed interest. My debt-income ratio is good because basically all I owe is less than $650. Do I have to wait until Feb? Or can I act now?

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If the LO you are working with can not get an approval for an FHA loan, then you will have to wait, unless you want to get into a sub-prime loan. I think that you can get a 95% Loan through a sub-prime lender, if not a 100% (probably 80/20), and then in 2 years refinance to an FHA or better yet, and lower rate, a Prime rate loan maybe available at that time.

Charles

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