2 years discharged and turned down today

[ethrjock]

Here is our situation. Discharged March 2007. Home was included in bankruptcy.

Credit scores very good considering. 700, 720 and 680. Several open lines of credit. 0 lates.

Underwrite turned us down and said we needed to wait the 3 years not 2.

Home way under our means. Income at $110 per year but home we are buying is $160,000. Practically 0 debt so debt to income was very low. On job for 8 years. $40k in documented assets too. Plenty in savings you name it we were model post bk borrowers.

The bank turned us down due to the home foreclosure. It was included in bk. Credit report shows that too and the foreclosure does not even show up on the credit report.

Is it possible that if we go to another lender or broker they may approve us or is the the story will most likely get everywhere?

In the beginning the loan officer at BOA said YES but the underwriter said NO. We wrote an explanation that revealed the reason. Wife disability plus interest rates rose quickly.

I am wondering if anyone else had success in getting a home when home was IIB after 2 years.

[spearmint]

Did you do a 7 or 13? I thought if you let the house go in a BK that you would get no foreclosure noted on your report, just a bk.

[Overmylimit]

I would try another lender, it sounds like you are sound financially and the house value is low. You should be able to get the loan.

[ethrjock]

yes it was a chapter 7 and yes the home was included in bk.

[monkatom]

everything I read says if home was IIB its 3 years from foreclosure date not BK discharge date. There are several posts regarding this topic and as you will see many lenders do not even have the facts. I actually called FHA and an underwriter and found out about the 3 year rule.

[StartingOver08]

Remember also, the banks have to underwrite according to Fannie Mae or Freddie Mac (unless the loan will not be sold). So the bank is going to follow those underwriting criteria at a minimum. Right now the criteria is at least 3 yrs for FHA and 4 yrs for conventional.

Its not you - its the industry clearing out under this credit mess right now. So you might find a lender that holds the loans, but that is extremely rare now. You might also find a seller willing to hold the note.

[Logan]

Here is our situation. Discharged March 2007. Home was included in bankruptcy.

Credit scores very good considering. 700, 720 and 680. Several open lines of credit. 0 lates.

Underwrite turned us down and said we needed to wait the 3 years not 2.

Home way under our means. Income at $110 per year but home we are buying is $160,000. Practically 0 debt so debt to income was very low. On job for 8 years. $40k in documented assets too. Plenty in savings you name it we were model post bk borrowers.

The bank turned us down due to the home foreclosure. It was included in bk. Credit report shows that too and the foreclosure does not even show up on the credit report.

Is it possible that if we go to another lender or broker they may approve us or is the the story will most likely get everywhere?

In the beginning the loan officer at BOA said YES but the underwriter said NO. We wrote an explanation that revealed the reason. Wife disability plus interest rates rose quickly.

I am wondering if anyone else had success in getting a home when home was IIB after 2 years.

If your BK was do to Medical Bills or something out of your control you may be able to get a loan with a letter of explanation. You would have to document how it was a one time occurrence. If you Google the FHA handbook you can find the section that talks about reducing the time from foreclosure.

Long Shot.....

Logan

[NoMoreRed]

Go to a different lender. I have afriend who works for BOA and they have really tightened up their lending because they aren't doing well. Oh, and stay away from countrywide at all costs.

[walkthaplank]

Go to a different lender. I have afriend who works for BOA and they have really tightened up their lending because they aren't doing well. Oh, and stay away from countrywide at all costs.

Never fear, Countrywide is now part of BofA

[ethrjock]

Thanks. I am now working with a broker so let's see if he gets me any closer. The BK was due to medical issues. My wife filed for social security disability in 2004 but was not declared disabled until 2008. During the time she filed she lost her job her income with it. She was vindicated later since she was ultimately awarded full disability in 08 and received all her back pay but the damage was already done. We filed for BK in 2006 discharged in march of 2007.

If its 3 years would it be 3 years from the time the home was sold in foreclosure or 3 years from discharge date? It sold last year so it's only been one year since the foreclosure was completed.

[Mi Bankruptcy]

My dad once told me about getting turned down for a loan for a rental and he went to the same bank but went to a different branch office and received approval after being turned down... In the same city.. lol.. try another place. good luck

[Logan]

Thanks. I am now working with a broker so let's see if he gets me any closer. The BK was due to medical issues. My wife filed for social security disability in 2004 but was not declared disabled until 2008. During the time she filed she lost her job her income with it. She was vindicated later since she was ultimately awarded full disability in 08 and received all her back pay but the damage was already done. We filed for BK in 2006 discharged in march of 2007.

If its 3 years would it be 3 years from the time the home was sold in foreclosure or 3 years from discharge date? It sold last year so it's only been one year since the foreclosure was completed.

Find a broker/loan officer who is confident they can get this loan closed.

I worked for a company that helped loan officers close tough loans and the majority of my business was actually from loan officers who just didn't know what they were doing.

Your loan can be closed you just need to find the right loan officer which can be tough.

Logan

[Flamingo]

The more secure your job and the bigger downpayment you have will be your best bet into getting any sort of mortgage due to your BK and due to the market right now with strict lending practices. Also time - the longer you carry good credit following your discharge the better your chances and also as to employment. Lenders right now don't want to lend to someone who may be laid off the month following closing. Then it would be just your wife's disability income coming in. It seems like you have recovered nicely from your BK but the market out there will still be very unfriendly for a while for those that have filed BK or for those that have foreclosed. Lending practices of the past are long gone and many will have to deal with stricter standards for acceptance and also many declines before they get an approval. It's tough because the market now for buying a home, especially for first time buyers, is the best it probably has ever been but for those with the BK and foreclosures, many probably will not be able to take advantage of it now or in the near future, some probably not ever.

[Logan]

The more secure your job and the bigger downpayment you have will be your best bet into getting any sort of mortgage due to your BK and due to the market right now with strict lending practices. Also time - the longer you carry good credit following your discharge the better your chances and also as to employment. Lenders right now don't want to lend to someone who may be laid off the month following closing. Then it would be just your wife's disability income coming in. It seems like you have recovered nicely from your BK but the market out there will still be very unfriendly for a while for those that have filed BK or for those that have foreclosed. Lending practices of the past are long gone and many will have to deal with stricter standards for acceptance and also many declines before they get an approval. It's tough because the market now for buying a home, especially for first time buyers, is the best it probably has ever been but for those with the BK and foreclosures, many probably will not be able to take advantage of it now or in the near future, some probably not ever.

For us BK people a low DTI is the best thing going for you. All mentioned above are very important but the underwriters really like a low DTI.

Logan

[PheobeKnowsBest]

The FHA guidelines state that a minimum of two years must elapse since the discharge date of the borrower and / or spouse's Chapter 7 bankruptcy, not the filing date. A full explanation of the bankruptcy will be required. The borrower must also have re-established good credit, qualify financially and have good job stability.


The FHA guidelines state that they will consider a borrower still paying on a Chapter 13 Bankruptcy if the payments to the court have been satisfactorily made and verified for a period of one year. In addition, the court trustee will need to give written approval to proceed. A full explanation of the bankruptcy will be required. The borrower must also have re-established good credit, qualify financially and have good job stability.

A borrower whose previous residence or other real property was foreclosed on or given a deed-in-lieu of foreclosure within the previous three years is generally not eligible for an FHA insured mortgage. However, if the foreclosure of the borrower's main residence was the result of extenuating circumstances beyond the borrower's control, and they have since established good credit, an exception may be granted. This does not include the inability to sell a home when transferring from one area to another.

I got this from a friend that does underwriting and these are the guidelines that they use.