Freddie | Agency Plus
Portfolio Access - Jumbo
What is a Foreclosure?
A Foreclosure is a specific legal process in which a lender attempts to recover the balance of a loan from a client who has stopped making payments by forcing the sale of the mortgaged property.
Identifying a Foreclosure
* Settlement on a real estate secured tradeline
* Paid Foreclosure
* Foreclosure; Collateral used to pay balance
Agency Plus, Fannie, FHA, & Freddie: See the Installment Debt Types topic if the foreclosure is on a timeshare.
Portfolio Access - Jumbo, USDA, & VA: See the Eligibility waiting periods below if the foreclosure is on a timeshare.
Identifying Foreclosure Date when Reporting on Credit
Identifying Foreclosure Date when NOT Reporting on Credit
If the credit report does not list a foreclosure date or the property was included in a bankruptcy:
* County records from website
* Sheriff's or Trustee's Deed the client received from the transfer
Client on Title & Not on the Note
* Approve/Eligible: Not allowed within 7 years of the LPA findings date.
* Approve/Ineligible: Not allowed within 7 years of the application date.
Not allowed within 3 years from today's date.
Foreclosure Seasoning Example
* Example of Date last delinquent start date from the credit report.
* Approve/Eligible: Follow LPA findings.
* Approve/Ineligible: Use the date of last delinquent as the start date and the application date as the end date.
Mortgage Discharged in a BK Prior to Foreclosure
In the event a mortgage was discharged through bankruptcy, obtain the final bankruptcy order to verify the mortgage was discharged in the bankruptcy. The bankruptcy waiting period may be used if all the following are true:
If the mortgage was not discharged (look for filed Reaffirmation Agreement in the court records) or documentation cannot be obtained to verify the mortgage was discharged, the foreclosure waiting period must be used.
Follow standard Foreclosure guides above.
See the Maximum Lates topic for requirements.
No additional requirements for foreclosures initiated, but not completed.
See the Maximum Lates topic and Adverse Credit Menu for requirements and exclusions.
Follow the Initiated Foreclosure guidance in the row above.
Reverse & HECM
If a foreign property has been foreclosed on, follow standard foreclosure guidelines.
Land contracts taken back by the seller must follow standard foreclosure guidelines, unless documentation is provided to show the land contract was taken back because of delinquent payments
Mobile Home Foreclosure
* If the client owns the land the home was in it is most likely a foreclosure.
* If the home was still on wheels, it is most likely a repossession.
No Manual Downgrade Requirements
If foreclosure does not report on credit report, loan may be required to be manually downgraded.
See the Manual Downgrade topic for additional guidance.