Have cash BUT a foreclosure on my record- financing possible?

Question

Hi There,

I am trying to figure out how to leverage my cash to invest and would like to know if anyone can help me see anything I cannot see given my particular situation. I have about 40K to invest in and currently have a 715-735 FICO.  I have purchased my own residence in the last 2 years using an Fha loan- I have about 100K in equity. I would love to use this to invest, but my obstacle is financing: I have a foreclosure on my record from October 2010- which matures October 2017- given the conventional financing rules (?)-  Is there any way around this obstacle in terms of using my own money to invest?  Interest rates on hard money make it not worth my while as I see it?

On another note: I also have a self directed IRA with 28K that I am trying to leverage, but the non recourse loans I am seeing require 40% down (condos) or 30% down (SFR).  Is this typically what is requested on non recourse loans?- are there any that can finance with less?

Any help or feedback with my particular situation is appreciated.

Wayne Brooks · Answer

@Albert Bui Yes exactly, this client walked away from a house in 2008, BK in 2009, foreclosure filed 2009, dismissed for no reason (lack of prosecution 2012), no active foreclosure , no filing on the horizon, 8 years later!

Albert Bui · Answer

Correct if the property was foreclosed while in the possession of the BK trustee then the BK 4 year time frame supercedes the 7 year time frame that would have normally been imposed by the foreclosure. The interesting part is I recently did a FHA loan and FHA does not recognize this foreclosure within the BK issue, if a borrower has a BK and a property within the BK forecloses then the 3 year FHA clock starts on the date property foreclosed as opposed to  when the BK was discharged. Sometimes these properties within the BK take months if not years to get disposed of so the FHA borrower is waiting around for awhile.

Wayne Brooks · Answer

@Albert Bui Yep, I stand corrected....I was thinking of a recent client who had a BK, followed by a foreclosure, and the recent Fannie reg.s "not resetting the clock" for a foreclosure After a BK.

Albert Bui · Answer

4 years for short sale, 7 years for foreclosure

Shaun Weekes · Answer

@Lisette S.

Depending on where you're looking to buy you can make a cash purchase and then refinance in a little over a year.

There are many options in the 5% - 8% range depending on how much you would have to put down as well.

I think it would be best to sit down with a seasoned loan officer or Broker so that they can put together options for you.

I hope this helps and have a great day.

Nathan Click · Answer

@Lisette S. - What type of properties are you looking to invest in?  I believe I can help you with the financing dispute the foreclosure.  Please feel free to reach out.