The Federal Housing Administration
is giving some former home owners another shot at home ownership. The
FHA sent a letter to mortgage lenders stating that it would offer
mortgage insurance to borrowers who once filed for bankruptcy, or who
lost their homes through foreclosure or short sale during the
recession.
Still, potential borrowers must show they can meet all other FHA
requirements and that they are no longer financially constrained.
Borrowers also will have to undergo housing counseling and FHA is
requiring lenders to verify that at least a year has passed since the
foreclosure or “economic event" that caused the foreclosure or
bankruptcy.
"FHA recognizes the hardships faced by these borrowers, and realizes
that their credit histories may not fully reflect their true ability or
propensity to repay a mortgage," according to the letter FHA sent to
lenders.
Source: “FHA offers mortgage backing to the once bankrupt,” HousingWire (Aug. 16, 2013)