Home equity loan

[kdom20]

A new memeber here. My Ch. 7 was discharged over 5 years ago. Since then all credit was fine and my FICO score is 720. When wife was working we purchased our home 4 yeas ago and under her name alone. Now the wife is not working (her FICO score is 780) and we have an equity in the house that is close to $75,000. Last week bank of America who holds our mortgage DECLINED us a home equity loan. They state "past credit experience "mine" with BofA". The wife is SAD because we were planning on buying a piece of land that we plan on building a house on in a year. Don't we qualify for such a loan? Any advice or any lenders you reccommend? Thanks all.

[Flamingo]

A new memeber here. My Ch. 7 was discharged over 5 years ago. Since then all credit was fine and my FICO score is 720. When wife was working we purchased our home 4 yeas ago and under her name alone. Now the wife is not working (her FICO score is 780) and we have an equity in the house that is close to $75,000. Last week bank of America who holds our mortgage DECLINED us a home equity loan. They state "past credit experience "mine" with BofA". The wife is SAD because we were planning on buying a piece of land that we plan on building a house on in a year. Don't we qualify for such a loan? Any advice or any lenders you reccommend? Thanks all.

It's quite obvious that since you are now the main provider of your household and have a Chapter 7 on your record (you have another 5 years to go before it is removed), that the BK was the reason for the decline. Just because your FICO score is good does not mean the bank has to offer you a line of credit or a loan. Especially if you included them in your BK. Some creditors just see a BK on your record and will not approve you. Since your wife is not working now you can't go the route of using her name alone as you did for the original home purchase. You can either wait a while until more time passes as to your BK, try again with another lender or your wife go back to work and try it with her added income or in her name alone if her income would be enough to qualify for that.

[justplaintired]

I am not sure but did you by chance file on BOA in your name? If your 1st mortgage is in your wife's name and not yours you are not getting any credit for the loan. Do you have any loans in your name. Research BK friendly mortgage co, some will deal with you whether others won't. Don't get too many hits on your credit report though. Ask other lenders and be upfront, tell them about the BK.

Good luck!

[kdom20]

It's quite obvious that since you are now the main provider of your household and have a Chapter 7 on your record (you have another 5 years to go before it is removed), that the BK was the reason for the decline. Just because your FICO score is good does not mean the bank has to offer you a line of credit or a loan. Especially if you included them in your BK. Some creditors just see a BK on your record and will not approve you. Since your wife is not working now you can't go the route of using her name alone as you did for the original home purchase. You can either wait a while until more time passes as to your BK, try again with another lender or your wife go back to work and try it with her added income or in her name alone if her income would be enough to qualify for that.

Wait for how long? another 5 years! I read on this forum that many have been approved for mortgages with lower FICO score and a waiting period that is way less than 5 years. I was surprised for the decline since I have quiet few credit cards (unsecured credit) now with limit on some that is $12,000, while a home equity loan is supposed to be secure. All I am trying to get to is, is it BofA because I included them in the BK over 5 years ago. If yes, then I want to persue other lenders whom I hope that some on this forum know about based on similar experience they may have. thanks.

[kdom20]

I am not sure but did you by chance file on BOA in your name? If your 1st mortgage is in your wife's name and not yours you are not getting any credit for the loan. Do you have any loans in your name. Research BK friendly mortgage co, some will deal with you whether others won't. Don't get too many hits on your credit report though. Ask other lenders and be upfront, tell them about the BK.

Good luck!

I applied on both of our names. I do have quiet few credit cards with limits that are up to $12,000, and I constantly receive preapproved offers. My credit after the BK has been perfect. I don't want too many hits that is why I posted this so maybe someone with similar experience can direct me to a lender that is more friendly. Thnkas.

[Flamingo]

Wait for how long? another 5 years! I read on this forum that many have been approved for mortgages with lower FICO score and a waiting period that is way less than 5 years. I was surprised for the decline since I have quiet few credit cards (unsecured credit) now with limit on some that is $12,000, while a home equity loan is supposed to be secure. All I am trying to get to is, is it BofA because I included them in the BK over 5 years ago. If yes, then I want to persue other lenders whom I hope that some on this forum know about based on similar experience they may have. thanks.

In my first posting to your initial posting, I mentioned it is probably the BK on your record and that you included BOA in your bankruptcy (I gathered that you did from your posting and you confirm above). Many large lenders if you include them in your filing will never extend credit to you again. Chase is well known for that and it appears BOA is another. As I stated initially, there are some lenders that will just not extend credit to you with a BK on your record and some will - yes you can pursue other lenders but be aware that just because your FICO is good and you have and other credit, that does not mean they have to extend further credit to you. Mortgage lenders now are extremely picky due to the recent market and even those with great credit are having difficulty. One suggestion I have for you is to contact the attorney who handled your Chapter 7 for a broker reference who can help you and your wife. With the situation as you are describing it, you are the one with the BK on your record and your wife now is not working so it all will depend on how your credit situation is viewed, your income, etc. You just may have a difficult time getting a line of credit under those circumstances. BOA already stated that to you with the decline.

WAMU is BK friendly and you may also want to try Citibank/CitiMortgage. Others may give you other suggestions. Best of luck to you both!

[imaloser]

kd - don't worry about boa being a wash. there are a lot of folks out there with excellent credit, in case you haven't heard the news, that have gotten their heloc's locked, or the available balance cancelled due to market conditions. you may have 75 grand in equity - but it is unlikely that anyone right now will give you that much on a heloc, were you to be approved. they will probably want to keep it at 75 or 80% ltv. have you tried a credit union? how about your local bank? with your credit score, i advise strongly that you stay away from the "leg breakers" - i.e., finance companies and the like. i suggest you try to deal directly with a bank or credit union versus a broker.

[kdom20]

In my first posting to your initial posting, I mentioned it is probably the BK on your record and that you included BOA in your bankruptcy (I gathered that you did from your posting and you confirm above). Many large lenders if you include them in your filing will never extend credit to you again. Chase is well known for that and it appears BOA is another. As I stated initially, there are some lenders that will just not extend credit to you with a BK on your record and some will - yes you can pursue other lenders but be aware that just because your FICO is good and you have and other credit, that does not mean they have to extend further credit to you. Mortgage lenders now are extremely picky due to the recent market and even those with great credit are having difficulty. One suggestion I have for you is to contact the attorney who handled your Chapter 7 for a broker reference who can help you and your wife. With the situation as you are describing it, you are the one with the BK on your record and your wife now is not working so it all will depend on how your credit situation is viewed, your income, etc. You just may have a difficult time getting a line of credit under those circumstances. BOA already stated that to you with the decline.

WAMU is BK friendly and you may also want to try Citibank/CitiMortgage. Others may give you other suggestions. Best of luck to you both!

Thanjks. I think you may be right about WAMU. I have their CC with a generous credit line.

[kdom20]

kd - don't worry about boa being a wash. there are a lot of folks out there with excellent credit, in case you haven't heard the news, that have gotten their heloc's locked, or the available balance cancelled due to market conditions. you may have 75 grand in equity - but it is unlikely that anyone right now will give you that much on a heloc, were you to be approved. they will probably want to keep it at 75 or 80% ltv. have you tried a credit union? how about your local bank? with your credit score, i advise strongly that you stay away from the "leg breakers" - i.e., finance companies and the like. i suggest you try to deal directly with a bank or credit union versus a broker.

Thanks. We only asked for $35,000. The lot is priced at $42,000 and we are putting $7,000 down. Unfortunately, our local banks are BofA and WELLs FRAGO. We've been banking with them for years. We applied to BofA since our mortgage is with them. I've been working in the same job for six years with an annual income of $83,000 and no DEBT (two cars are paid off and no CC debt) except the mortgage. We just wanted to secure the land and build in a year. we will also consider a "CONSTRUCTION LOAN" if that can be obtained easier. Any thoughts? Thanks.

[HHM]

First, I would question the wisdom of borrowing against your house to purchase land at this time. But that is neither here nor there.

The problem is not really your credit worthiness per se, the issue is with the mortgage market. Many banks actually have plenty of money to lend, but they have no one to sell the notes too. The only people buying notes are FHA, Fannie Mai, Freddie Mac, and VA. What happens is, when a bank makes a mortgage loan, it turns around and sells that loan to investors...well, the foreclosure problem and declining real estate values have dried up all Wall Street Money. Thus, banks are now forced to carefully consider which loans to make since they must create their own portfolio.

[bkdone]

B of A is being extremely cautious... B of A saw from the home equity application that your wife (who holds the the first mortgage with them) is no longer working. They figure that your family is living off of your wages...

You have applied for a 2nd on the same house, where the title holder has zero income...red flag #1...Mortgage applicant #2 (you) have a Ch. 7 still reporting...red flag #2...You BK'd on them 5 years ago...red flag #3. Are you really that suprised that they declined you?

Now...with that said, I can see you finding a mortgage broker (apply once and they will shop it around for you...only one credit pull...) and possibly refinancing (taking out a new loan for the 1st mortgage + whatever cash you need.) Then you still only have 1 mortgage.

Also to consider...is the $75K in equity your estimate or a current value considering the value of homes has dropped significantly?

[kdom20]

Thanks. BofA appraised our house 5 months ago to remove PMI. It was appraised at $200K while we owe 118k, so the estimate of the 75k is very onsevative considering that our area is not one that is hit w/ this housing bubble.

p,s, any brokerage ompany that you reccommend. BTW, the money is to purhase a piece of land that we really like and plan on building on in a year (the wife will get back to work then). Many thanks.

[bkdone]

Look in your local newspaper for local brokerage firms. I have used one twice in my town. It's nice because they are familiar with properties in your area, the market trends there, and they have a database of friends and contemporaries that can help with trickier loans. The local companies shop the loans to all of the same companies you'd find online (like with LendingTree...etc.) but you can sit down with the broker face to face. Sometimes just getting them to see you and fully understand your circumstances is half the battle. Good luck and keep us posted.

[Logan]

Just go to another bank. You're far enough out of BK so it shouldn't be a problem.

As far as BOFA is concerned---would you lend money to someone who didn't pay you back in the past?

Logan

[kdom20]

The answer is, not really.