Will banks lend on their own foreclosed homes?

With the tightening on home lending, anyone with a low score (below 620 or maybe 580 but don’t count on it) has trouble finding a lender even if they pay a hefty down (10-20%) and can easily make the payments.

BUT, banks hate having houses. They would rather sell them so suppose someone with a low FICO walks into SDMB Bank and says, “Here is 15% down and my W2’s to show that the mortgage payment is less than 30% of my net pay.” would the bank make a deal or will they say, “Sorry, your FICO is 565. Piss off ya wanker!”


A loan considers the credit score, income and the property/equity, etc.

They won’t lend money to someone who is below the standards for the loan. Doesn’t matter if the house is foreclosed. Your debt-to-income matters, as does your score, time at job, and the other typical factors.


The question would be - why is your score so low? If you have a decent income and low debt, then the usual case would be that the income is not reliable (new job) or some other factor - like erratic bill payment, occasional willingness to overload yourself with debt, recent bankruptcy, etc.

Whether some banks are willing to dig into your personal circumstances and get past them - well, the trouble with that is some people can be marvelously manipulative and convincing liars. When someone says as simple as “but it was my ex-wife who did the spending, she’s gone now” how does a bank verify any of those sorts of statements without hiring detectives? If you were a lying con, how could they tell? Simpler to say no than to spend a ton of money investigating someone’s story. Maybe if the bank manager knows you personally and knows the whole story, they might go for it.

False Dichotomy – They would rather tell you to take a hike and sell to someone with good credit.