Mortgage Guidelines On Timeshare Foreclosure On Home Loans

by Gustan Cho

This Article Is About Mortgage Guidelines On Timeshare Foreclosure On Home Loans

There are people who have been approached and invited to a timeshare presentation vacation at no cost.

  • The timeshare company often offers free lodging including free meals and entertainment
  • There is no obligation for you to buy anything
  • The whole trip is free of charge
  • Free?
  • Nothing in this world is free
  • The catch is the timeshare representative’s job is to sell you into becoming a member of their timeshare purchase program
  • Many of those who accept the invitation have no idea how they will be suckered into buying a timeshare membership by the time the timeshare trip is over

So what is a timeshare?

A¬†timeshare is an arrangement that entitles multiple owners to use a vacation property for a certain number of days per year. In theory, it may seem alluring to own a piece of a property you can visit every year for a fraction of what it would cost to own the whole thing. In reality, things aren’t usually so cut and dried.

Many timeshare membership owners have buyer’s remorse after buying a timeshare.

  • A substantial number of membership owners end up giving up on the timeshare and foreclose
  • This is because many believe they were overly pressured into buying the membership and do not have the time to use it
  • Others have the time to use the timeshare but have a hard time getting booked at their preferred time of year

In this blog, we will go over the credit consequences of a timeshare foreclosure when qualifying for a mortgage.

How Is Timeshare Foreclosure Viewed By HUD, VA, USDA, FANNIE, FREDDIE MAC

HUD, VA, USDA, Fannie Mae, Freddie Mac Mortgage Guidelines On Timeshare Foreclosure are all the same.

  • There is no waiting period after timeshare foreclosure to qualify for government and/or conventional loans
  • Under HUD, VA, USDA, Fannie Mae, Freddie Mac Agency Mortgage Guidelines, a timeshare is NOT viewed as real estate
  • A timeshare loan is not considered a home mortgage
  • A timeshare loan is an installment loan
  • Therefore, there is no waiting period after a timeshare foreclosure since a timeshare loan is not considered a mortgage, and a timeshare are not considered real estate

In this article, we will discuss and cover Mortgage Guidelines On Timeshare Foreclosure On Home Loans.

Mortgage Guidelines On Timeshare Foreclosure Versus Real Estate Foreclosure

Mortgage Guidelines On Timeshare Foreclosure is different than real estate foreclosure.

  • All government and conventional mortgage programs require a mandatory waiting period requirement after a housing event
  • There are three different types of housing events: Foreclosure, a deed in lieu of foreclosure, a short sale
  • The waiting period requirements depend on the type of housing event and the type of loan program
  • Capital Lending Network, Inc. offers non-QM mortgages one day out of foreclosure with no waiting period requirements
  • However, non-QM loans require a 20% down payment and have higher mortgage rates than government and conventional loans
  • Non-QM mortgage rates depend on the down payment and the borrower’s credit scores

A timeshare loan is not considered as a real estate mortgage under HUD, VA, USDA, Fannie Mae, Freddie Mac Agency Guidelines. A timeshare loan is considered an installment loan. Therefore, the waiting period requirement agency mortgage guidelines after a timeshare foreclosure does not apply when it comes to qualifying for a new mortgage.

Waiting Period Guidelines After Foreclosure

In this paragraph, we will discuss and cover the waiting period agency guidelines after foreclosure:

HUD Agency Guidelines On Waiting Period After Foreclosure On FHA Loans:

  • There is a three year waiting period requirement after foreclosure, deed in lieu of foreclosure, short sale to qualify for an FHA loan
  • If the borrower had a mortgage included in bankruptcy and the foreclosure happened after the bankruptcy, there is a three year waiting period requirement after foreclosure
  • The discharged date of the bankruptcy does not matter

VA Agency Guidelines On Waiting Period After Foreclosure On VA Loans:

  • There is a two year waiting period requirement after foreclosure, deed in lieu of foreclosure, short sale to qualify for a VA loan
  • If the borrower had a mortgage included in bankruptcy and the foreclosure happened after the bankruptcy, there is a two year waiting period requirement after foreclosure
  • The discharged date of the bankruptcy does not matter

USDA Agency Guidelines On Waiting Period After Foreclosure On USDA Loans:

  • There is a three year waiting period requirement after foreclosure, deed in lieu of foreclosure, short sale to qualify for USDA loans
  • If the borrower had a mortgage included in bankruptcy and the foreclosure happened after the bankruptcy, there is a three year waiting period requirement after foreclosure
  • The discharged date of the bankruptcy does not matter

Fannie Mae And Freddie Mac Guidelines On Waiting Period After Foreclosure On Conventional Loans:

  • There is a four-year waiting period after a deed in lieu of foreclosure and a short sale to qualify for a conventional loan
  • There is a seven-year waiting period after a regular foreclosure to qualify for a conventional loan
  • If there was a prior mortgage included in the bankruptcy, there is a four year period to qualify for a conventional mortgage after the discharged date of bankruptcy
  • The recorded date of the foreclosure does not matter if the prior mortgage was included in the bankruptcy
  • The mortgage cannot be reaffirmed

To qualify for a mortgage with a lender licensed in multiple states with no overlays on government and conventional loans, please contact us at 262-716-8151 or text us for a faster response. Or email us at gcho@gustancho.com. The team at Gustan Cho Associates is available 7 days a week, evenings, weekends, and holidays.

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Erin McCloskey January 1, 2021 - 7:52 pm

I am now 1.2 years post Chapter 13. My score is 710+ and I earned 90k in 2020. Do I need to do a manually underwritten approval? Thanks in advance.

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Marlene Cox January 3, 2021 - 1:43 am

I am Veteran wanting to use my VA Loan. A year ago I had to file for Chapter 13 bankruptcy, but have been on time every month and am working to rebuild my credit. I currently rent the home I am in for $2,136 per month. My credit score is the low 600s but for the price i pay every month to rent, I could be paying a mortgage and saving money. I also get a monthly disabled pension from the VA every month. I have my COE and DD214 on hand and would like to find out what my options are. Thank you for your time.

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