The Lender Says “NO, YOU CAN’T!”

We’ve heard President Barack Obama say “Yes we can!”

Not for this scenario! A lender who does FHA loans told me about a conversation he had with a potential borrower a couple weeks ago. Here is what he reported to me:

“After a lot of digging, the bottom line of their situation was made clear.
“Husband owned a home and lost it through foreclosure. He also filed a BK chapter 7 in his name only thinking this would allow the wife to purchase a home on her own.
“Because California is a community property state, the FHA considers his actions against her even if she was not directly involved.  She’s an owner, even if her name was not on the loan, so technically she did lose her home through foreclosure. The issue applies in either type of loan, conventional or FHA.”

After a more candid conversation on the phone with him, he mentioned that the couple owned the home together and subsequently refinanced in his name only, then lost it in the foreclosure.

Lenders are more strict when it comes to what are considered “strategic refinancing” or “strategic defaults” or “strategic foreclosures”.

They’re wising up, folks!

(Info provided by Luis C. Munoz. Visit his site at