Derogatory Waiting PeriodsHome Purchases After Bankruptcy, Foreclosure or Short SaleHave you been impacted by bankruptcy, foreclosure or short sale and think homeownership is not in your future? It is important to know that each individual’s situation is unique and it is important to discuss your options with a Mortgage Professional.

This document is not intended as an offer to extend credit nor a commitment to lend. The information contained in this document is intended to be used for informational purposes only and to provide a general overview of the topics described herein.

Please call me today if you would like additional information!

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STANDARD CONVENTIONAL: DETERMINED BY APPLICATION DATE

Derogatory Item Extenuating Circumstances Financial Mismanagement

Chapter 7 2 years or greater from either the discharge or dismissal date

4 years or greater from either the discharge or dismissal date

Chapter 13 2 years or greater from either the discharge or dismissal date

2 years from discharge date or 4 years from dismissal

Multiple Bankruptcies

3 years or greater from either the discharge or dismissal dateThe most recent bankruptcy must have been the result of extenuating circumstances or the borrower must meet the 5 year waiting period.

5 years or greater from either the discharge or dismissal date

Short Sale

From date sale closed and transferred to new owner: 2 years: 80% LTV2 years: 90% LTV with mortgage insurance Primary Residence Only7 years: 97% with Mortgage Insurance

From date sale closed and transferred to new owner: 2 years: 80% LTV (not allowed on J600)4 years: 90% LTV 7 years: 97% with Mortgage Insurance

Deed in Lieu of Foreclosure

From the date transferred back to the bank:4 years: Owner Occupied, Purchase or Rate-term max 90% with borrowers own funds (due to MI restriction)7 years: Cash-out, 2nd homes and Investment properties

From the date transferred back to the bank:4 years: Owner Occupied, Purchase or Rate-term max 90% with borrowers own funds (due to MI restriction)7 years: Cash-out, 2nd homes and Investment properties

Foreclosure

From the date foreclosure completed and transferred back to the bank:3 years: 80% LTV, Rate-Term (all occupancy) 4 years: to 90% (MI) SFR, OO, Purchase (no gift) (Cash-out not allowed)

From the date foreclosure completed and transferred back to the bank:7 years: Time elapsed must be 7 years or greater if the property is a 2nd home or investment purchase or cash-out transaction

Extenuating Circumstances Explained: Extenuating circumstances are nonrecurring events that are beyond the borrower’s control that result in a sudden, significant, and prolonged reduction in income or a catastrophic increase in financial obligations.• The borrower must present a letter that supports the claims of the extenuating circumstance; confirm the nature of the event that led to the

related action and illustrate that the borrower had no reasonable options other than to default on their financial obligations.• The borrower’s claim must be evidenced by third documentation to confirm the event. Examples include: medical reports or bills, notice of job

layoff, job severance papers, ect.• Credit Report documenting date of discharge or copy of the discharge paper, if applicable

Equal Housing OpportunityGlobal Advisory Group, Inc. dba Mortgage Advisory Group Rev. 12/13/2011BELLEVUE • EDMONDS • EVERETT • MARYSVILLE • MARYSVILLE , KW • MILL CREEK • WENATCHEE • WOODINVILLE • ARIZONA • IDAHO

Mike BonMLO-119781Mortgage AdvisorCell: 253-495-2095Direct: 425-224-8347mbon@MAGloans.net

Mill Creek Office • CL-36212 • 15117 Main Street, Ste B106 • Mill Creek, WA 98012 Phone: 425.224.8300 • Toll Free: 888.618.8007 • Fax: 425.224.8303

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FHA: DETERMINED BY CREDIT APPROVAL

Derogatory Item Extenuating Circumstances Financial Mismanagement (J600 requires 680 FICO)

Chapter 71 year since date of discharge with evidence of re-estab-lished credit

2 years since date of discharge with re-established credit

Chapter 13Allowed after 12 months of the payout period provided performance has been satisfactory and borrower receives court approval —follow 4155.1

Allowed after 12 months of the payout period provided performance has been satisfactory andborrower receives court approval —follow 4155.1

Short Sale3 years since completion or transfer date. Exception: 1 year for isolated cases if borrower was not in default at time of transfer

3 years since completion or transfer date

Foreclosure/ Deed in Lieu

3 years since completion or transfer date 3 years since completion or transfer date

Additional Notes from HUD: FHA considers extenuating circumstances to be beyond the borrowers control such as:Serious illness or death of a wage earner. The borrower must have re-established credit since the event. Divorce, inability to sell property due to loss of job or relocation do not qualify.Note: Borrowers are not eligible for a new FHA insured loan if they pursued a short sale to take advantage of a declining market or purchase at a reduced price or superior property within a reasonable commuting distance. Mortgage included in bankruptcies are considered foreclosure and require 3 year from transfer date.

VA: DETERMINED BY CREDIT APPROVAL

Derogatory Item Extenuating Circumstances Financial Mismanagement (J600 requires 680 FICO)

Chapter 72 years from either the discharge or dismissal date12-24 months - exceptions allowed with re- established credit and extenuating circumstances

2 years from either the discharge or dismissal date

Chapter 13Allowed after 12 months of the payout period provided performance has been satisfactory and borrower receives court approval —follow 4155.1

Allowed after 12 months of the payout period provided performance has been satisfactory andborrower receives court approval —follow 4155.1

Short Sale Foreclosure/ Deed in Lieu

2 years since completion or transfer date 2 years since completion or transfer date

Additional Notes from VA: Follow the Conventional explanation above examples include:• Unemployment or prolonged strikes • Medical bills not covered by Insurance • Divorce is NOT viewed as extenuating as it is not viewed as “beyond the borrower’s control”

USDA: DETERMINED BY CREDIT APPROVAL

Derogatory Item Extenuating Circumstances Financial Mismanagement (J600 requires 680 FICO)

Chapter 73 years since date of discharge 3 years since date of discharge

Chapter 131 year since date of discharge or completed payment plan 1 year since date of discharge or completed payment

plan

Short Sale Foreclosure/ Deed in Lieu

From date sale closed and transferred to new owner or bank: 3 years

From date sale closed and transferred to new -owner or bank: 3 years

USDA Exceptions Exceptions may be made to the waiting periods listed above with:• 640 FICO and GUS Approval • Extenuating circumstances documented with LOE• Subject to Underwriter Approval

USDA considers the following as compensating factors:• Length of Employment• Low DTI• Assets/Retirement • Limit use of credit

Additional Notes from USDA: Circumstances surrounding the adverse information must have been temporary in nature, and beyond the borrower’s control, and have been removed so their reoccurrence is unlikely to recur.• Job Loss • Delay in Government Benefits • Other loss in income • Increased expenses due to illness, death, etc. • Borrower letter of explanation is required

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