Bad Credit California Mortgage Lenders – Min 500 Credit Score Approvals!

Bad Credit Mortgage After Foreclosure California 
A bad credit housing issue is any one of the following events listed below. If the bad credit housing issue occurred within 24 months of closing, it’s considered a Recent Housing Event: • Foreclosure • Deed-in-Lieu • Short Sale • Modification • 1×120

Seasoning of a foreclosure, deed-in-lieu, or short sale is measured from the date of completed sale or final property transfer. The bad credit housing issue must be completed prior to loan closing with no outstanding deficiency balance remaining.

For a 120-day mortgage late, seasoning is from the date the mortgage was brought current. Seasoning for a modification is from the date the modification
was executed.

If the property was surrendered in a Chapter 7 bankruptcy, the bankruptcy discharge date is used for seasoning. Bankruptcy papers may be required to show the property was surrendered. The foreclosure action is not required to be fully complete.

There is no seasoning requirement for a Recent Housing Event. It must be completed prior to loan closing with no outstanding deficiency balance remaining. A signed, detailed letter of explanation from the bad credit mortgage applicants providing the reason for the event must be obtained. If the explanation indicates an inability to make prior housing payments, GB will consider the reasonableness of the new housing payment in comparison to the prior housing payment.

Bad Credit California Mortgage Lenders Collection Accounts
 Individual collection and non-mortgage charge-off accounts equal to or greater than $250 and accounts that total more than $2,000 must be paid in full prior to or at closing.
 Medical bad credit collections may remain open with a max cumulative balance of $10,000
 bad credit collections and charge-offs that have expired under the state statute of limitations on debts may be excluded. Evidence of expiration must be documented.
 All open judgments, garnishments, and all outstanding liens must be paid off prior to or at loan closing.

Charge-offs and bad credit collections not excluded by the above bullet points must be paid or may stay open if using one or a combination of both of the following:
o Payments for open charge-offs or bad credit collections are included in the DTI (Subject to program DTI restrictions)
o Reserves are sufficient to cover the balance of the charge-offs or bad credit collections and meet reserve requirements.
Low Credit Score California Mortgage Lenders 
The primary wage-earner score is used as the Representative Credit Score for each loan. Additional bad credit mortgage applicants on the loan must have at least one valid score of 500 or greater.
To determine the Representative Credit Score for the primary wage-earner, select the middle score when 3 agency scores are provided and the lower score when only 2 agency scores are provided.

Chapter 7 and Chapter 11 or 13 bankruptcies must be discharged for a minimum of 12 months from closing date. Seasoning is measured from the month and year of discharge.

There is no seasoning requirement for Chapter 13 bankruptcies when the bankruptcy is discharged prior to closing. If the Chapter 13 bankruptcy was dismissed
, 12-months’ seasoning is required from the date of the dismissal. A Chapter 13 bankruptcy may remain open after loan closing when all of the following requirements are met:
• A minimum 12-month repayment period in the bankruptcy has elapsed.
• All required bankruptcy plan payments have been made on time.
• The bad credit mortgage applicants has received written permission from bankruptcy court to enter into the mortgage transaction.
• Full bankruptcy papers may be required.

For a 120-day mortgage late, seasoning is from the date the mortgage was brought current. Seasoning for a modification is from the date the modification
was executed.

A cash-out refinance to pay off the remaining balance of a Chapter 13 bankruptcy is allowed. In addition to meeting the requirements listed above, the transaction must provide an overall reduction in monthly obligations for the bad credit mortgage applicants.

Bad Credit Mortgage Lenders Downpayment Requirements
Down payment funds should be documented for 60 days per the Fannie Mae Verification of Deposits and Assets guidelines with the documentation
included in the loan file.

In addition to documenting the down payment, closing costs, and minimum PITI A reserve requirements, all bad credit mortgage applicants must disclose and verify all other
liquid assets.

• Business funds may be used for down payment, closing costs and for the purposes of calculating reserves. GreenBox will perform a business cash flow analysis to confirm that the withdrawal of funds for this transaction will not have a negative impact on the business. GreenBox will utilize FNMA Form 1084 or a similar cash flow analysis form to show the business can support the withdrawal of the funds.
• Vested Retirement Account funds –60% may be considered for closing and/or reserves;
• Non-vested or restricted stock accounts are not eligible for use as down payment or reserves.
• Any assets which produce income or are used as income already included in the income calculation are not eligible for use as down payment or reserves.• Account Statements should cover most recent 60-day period
• Stocks/Bond/Mutual Funds -100% of stock accounts can be considered in the calculation of assets for closing and reserves;

 

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