Really nervous, in middle of re-fi process, not sure if we will be approved..

[STEPH1079]

We were discharged from our Ch.13 in July - last payment made in May.
We have been working with a reputable broker (have known him for years) and hope to do a FHA refinance as we are in an ARM.
Automative underwriting didn't approve it. He said he figured they wouldn't but it was worth a try. Our credit scores are in the mid 630s right now.
He is sending all of our paperwork for manual underwriting and believes it will be approved as we fall within all of the FHA guidelines.
I can't help but feel sick to my stomach. Is this a normal process - to have loans go through manual underwriting?

[bcvw]

That's the way it was done before credit scores became the rage. You may just have an underwriter who will see the upside to your situation and approve you.

[MSPrincess]

This is actually my first post. This board has been a great savior for my mental state! We were discharged in May.
I was a mortgage loan officer for 20 years and I did tons of FHA loans. The manual underwrite is due to the bankruptcy being discharged so recently. With scores like that you should have no problem getting the loan refinanced. It may take a few days longer and they will go through your file with a fine tooth comb but you should be fine! Please don't worry.

[STEPH1079]

Thanks so much for your reply. I agree, this board has been a savior! It has given me tons of useful information.
We go today to get the rest of the paperwork squared away for the underwriter. He said he hopes to have it back by Friday. I am keeping my fingers crossed!

[Flamingo]

We went through the refinance process prior to discharge as we bought out of our Chapter 13 Plan a year early. If you have a great broker, you will be fine. Please note that you will have PMI to pay for the first five years of your mortgage and review the Truth in Lending Statement completely when you receive it and ask questions! I questioned completely the amount of PMI listed and involved from top to bottom because we only refinanced for less than half the value of our house, only owing $30,000 on our prevoius mortgage paid off in the refinancing - we had way more than 20% equity in the house - more like 50% available even after the refinancing. I even researched the information online to ensure what they told me was correct - it was. So don't be afraid to ask questions if you see something listed that doesn't make any sense to you or that you don't understand - there is a ton of information as to FHA loans online also that can help you.

[bcvw]

I refinanced a year out of a CH7 and didn't have to pay PMI.

[Logan]

We went through the refinance process prior to discharge as we bought out of our Chapter 13 Plan a year early. If you have a great broker, you will be fine. Please note that you will have PMI to pay for the first five years of your mortgage and review the Truth in Lending Statement completely when you receive it and ask questions! I questioned completely the amount of PMI listed and involved from top to bottom because we only refinanced for less than half the value of our house, only owing $30,000 on our prevoius mortgage paid off in the refinancing - we had way more than 20% equity in the house - more like 50% available even after the refinancing. I even researched the information online to ensure what they told me was correct - it was. So don't be afraid to ask questions if you see something listed that doesn't make any sense to you or that you don't understand - there is a ton of information as to FHA loans online also that can help you.

PMI isn't necessarily required.

Logan