Question:
I am beyond frustrated! I just went to a foreclosure auction- and won on a bid for a very reasonable amount- I have over a 720 credit score and was able to put 20-35% down- and they still turned me down at financing! How in the owrld! They stated that i was too much of a risk because they require that you have money available each month to be able to make TWO mortgage payments- after all your other expenses! you don't have to make two payments, but have proof of the funds for that to get financing! Has this happened to any one else? I'm outraged! And then they wouldn't let us bid anymore, even though we could have easily picked up another property for a price that they would have been willing to lend to us! What's going on with this?!
You weren't denied due to credit score-it was that the bank felt your debt income ratio was too high. Also, most foreclosed homes require expensive repairs.
i can not say this happen in you case but i have hear cases before where property was auction off for foreclosure and back taxes it is a big show because the owner has all ready been chosen by the person holding the sale and they try to find some petty reason to get rid of other bidder who stand in there way! just a rumor but i have heard it from several folks!
They are starting to close up on lending practices and put in stricter rules due to the subprime mortgage crisis. They are also looking at your short term and long term debt to income ratio. Basically they are asking themselves how much your reserves are to protect your investments/houses?
There's also a price to pay in those type of loans. Higher percentage rates because it is a foreclosed property/secondary home/investment home.
Good luck! And for more info on foreclosures, just a book I recommend: Complete Guide to Real Estate Tax Liens and Foreclosure Deeds: Learn in 7 Days [ISBN 0978834682] by Don Sausa
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