FHA lenders can now allow homeowners to go 12 months late before a mortgage is declared in default.  The old requirement was 120 days.  This has advantages and disadvantages to the homeowner.

The main advantage is more time for homeowners to try and work something out, and thereby save their home.

It is still three years (at a minimum) after a foreclosure (or “foreclosure type event”) before they can qualify for a new mortgage.  This is measured from the time the old home is lost, not from when they go into default.  So if the old home cannot be saved, this longer process delays a fresh start.


My advice to the homeowner in trouble?  Make every effort to make good on all obligations.  At the first sign of trouble, contact the lender, and be up-front and honest.  If a workout arrangement is made, make sure it is something you can do, based on your circumstances at the time.  Do not bet on something down the road.  And get everything in writing.

Economic difficulty is a fact of life for many people these days.  But some old rules are still valid – do the best you can, communicate well, and keep good records.