All Forum Posts by: Jacob Beg

Nicholas: 

Thanks for the reply. 

I read the information you quoted, it was not clear to me whether a person who is not on the deed of trust or mortgage note (not responsible for the debt), is considered to have gone into foreclosure if they were never responsible for the debt for not having signed the mortgage note. 

Hi All,

I am unable to find a definitive answer through FNMA guidelines and hope someone can shed some light.

While going through a mortgage for an investment property, underwriter asked my dad to confirm that the foreclosure of a certain property happened 7+ years ago. It took him by surprise as he has stellar credit and is overly responsible.

It appears that over 12 years ago, he made an investment with a friend. The friend was the borrower but my dad was only on the deed of the house (he was not a borrower). The real estate crash came and the friend mismanaged the project and abandoned the property, my dad simply wrote off his small investment. It appears that instead of foreclosing the property in 08/09/10, the property sat in a state of dilapidation and was only foreclosed in 2015. If this is held against my dad, then my reading of FNMA guideline is that he is excluded from purchasing "investment property". 

I am not sure how FNMA defines "foreclosure" and I can't find this information on their website. My dad purchased and sold many conventionally financed properties since then, but for the first time a lender is querying that particular property. He has a large deposit at risk so any advice on this matter is much appreciated. In particular, is he considered to have foreclosed on the property. 

Thank you!