Anyone with a recent discharge have any luck with mortgage brokers?

[UpsideDown]

We were just discharged a couple of weeks ago and would like to get a mortgage loan (I know, I know, go ahead and laugh). I see a lot of mortgage brokers online that say bad credit and recent BK no problem, but to read on here it seems just about impossible to get a loan w/a recent BK.

I had excellent credit history up until BK, I have a good income, stable employment history (12 yrs on my current job, 9 yrs on the previous one), no debt and can't file BK again anytime soon. Seems like I'd be a much better credit risk now than I was 4 yrs ago when I had $30K credit card debt and still qualified for $265K worth of mortgage loans. Now, I'd just like to borrow about $150K, which I can easily afford. I just don't get it.

So, back to the original question.....are there any mortgage brokers around who'll really lend to people recently disharged, or are these ads too good to be true?

[Flamingo]

If it sounds too good to be true, it usually is. The same applies to car loans right out of discharge. The fees and interest rates are sky high. Time is your friend after discharge. You will find it difficult, if not impossible, to get a decent loan or mortgage at a decent rate until at least 3 or more years past discharge and may still have difficulty then. Filing BK is filing BK. It's gonna haunt you for a while yet before the storm clears. For the next few years you will have to prove yourself again creditworthy by paying everything on time and being prudent with your credit. If you apply for too much and get denied, it will work against you. Do a thorough search on this forum - it's chock full of information as to folks trying hard to get mortgages, either successfully or unsuccessfully, after discharge. Best of luck to you.

[HHM]

It will be tough. The only lending is coming from FHA, VA, or Fannie/Freddi guaranteed mortgages and they have fairely rigid standards when it comes to BK (FHA is 2 years from discharge, the rest are longer). There really is no private lending going on right now.

In your case, to even have a shot at it, you would need a hefty down payment, probably 20%, and even then, unless you have mitigating circumstances to explain your BK, you are probably dead in the water. Also, even if you could get financed now, the deal would be really bad, you would be stuck with a really high interest rate.

[Logan]

We were just discharged a couple of weeks ago and would like to get a mortgage loan (I know, I know, go ahead and laugh). I see a lot of mortgage brokers online that say bad credit and recent BK no problem, but to read on here it seems just about impossible to get a loan w/a recent BK.

I had excellent credit history up until BK, I have a good income, stable employment history (12 yrs on my current job, 9 yrs on the previous one), no debt and can't file BK again anytime soon. Seems like I'd be a much better credit risk now than I was 4 yrs ago when I had $30K credit card debt and still qualified for $265K worth of mortgage loans. Now, I'd just like to borrow about $150K, which I can easily afford. I just don't get it.

So, back to the original question.....are there any mortgage brokers around who'll really lend to people recently disharged, or are these ads too good to be true?

You need 2 years out of BK then you can go FHA. I was approved last week with 3.5% down at 5.125% interest rate. The computer approved it with no manual underwriting.

Good Luck,

Logan

[jane taylor]

You could try NACA. (Neighborhood Assistance Corporation of America) The only problem with them is that it is a lengthy process. You have to submit a lot of documentation, show that you can save money over a period of three months to cover the "payment shock" (what your mortgage will be minus your current rent), and attend a couple of their workshops. They are not credit score driven, it is a consumer advocacy group and they are reputable. Our mortgage broker recommended them to us and she has been in the business for over 30 years. We are just frustrated because our local NACA office is way understaffed.

Good luck!

jane

[oldhack]

You need 2 years out of BK then you can go FHA...

IF the BK was a Chapter 7. FHA (theoretically, anyway) will guarantee loans as early a year into a Chapter 13 plan, with trustee/court permission; and if a Chapter 13 has been discharged, FHA has no policy regarding you at all. You're good to go as far as your credit record/scores will take you.
My Chapter 13 was discharged in January and my mortgage closed in March. Interest rate was 5.5%.
I have no idea whether loan standards have tightened or relaxed in the past three months, but it certainly was possible for me -- using a mortgage broker -- to get an FHA mortgage as few as 55 days after discharge as recently as earlier this year.

[HHM]

IF the BK was a Chapter 7. FHA (theoretically, anyway) will guarantee loans as early a year into a Chapter 13 plan, with trustee/court permission; and if a Chapter 13 has been discharged, FHA has no policy regarding you at all. You're good to go as far as your credit record/scores will take you.
My Chapter 13 was discharged in January and my mortgage closed in March. Interest rate was 5.5%.
I have no idea whether loan standards have tightened or relaxed in the past three months, but it certainly was possible for me -- using a mortgage broker -- to get an FHA mortgage as few as 55 days after discharge as recently as earlier this year.

Good point about 7 vs 13. From the OP's signature, looks like he converted his 13 to a 7, so chapter 7 rules will probably apply.

[UpsideDown]

Thanks for the replies; that's about what I figured. Guess maybe we should've stuck with the Ch. 13, stripped the 2nd and kept the house. We really love the house and neighborhood, and wanted to stay here, but we tried to make the best "business" decision about this BK without letting our emotions come into play. That's why we converted to 7, thinking it made better business sense.

We may try negotiating a settlement with the 2nd mortgage holder to buy out the lien and then just keep up the 1st. Our current 2nd mtge holder just bought our loan from the original lender, (who is out of business now) so maybe they'll figure something is better than nothing, which is what they'll get if it forecloses. But then again, mortgage lenders don't really seem to be very willing to negotiate, from what I'm hearing.

[Scooter10]

Logan - Did you have a foreclosure? I cann't remember from all the posts (thank you!), but i think you did.... How did you get 2 years?

[Logan]

Logan - Did you have a foreclosure? I cann't remember from all the posts (thank you!), but i think you did.... How did you get 2 years?

No foreclosure for me.

Logan