Need help re: buying a house

[mikeymae]

Hello everyone! It's been awhile since I was here. My husband and I filed bankruptcy chapter 7 more than 2 years ago. We recently got pre-approved or prequalified for a house loan and found the house perfect for our family. We are closing on the 1st of June and while waiting we got news from our lender that the underwriter needed more documents about our bankruptcy and that they also needed to know if a house was included in the bankruptcy filing. When we first asked to be pre-qualified we disclosed everything to our lender...we included a house in our filing and we did not reaffirm during the process. I am just in need of some advice on how to go about this since we are closing on the 1st and this issue has come up. I am concern that this will cause us to lose the house...everything has been smooth and all until now when the underwriter wanted more information about the bk. Can someone please help us? I am not understanding why we got prequalified in the first place when they already know our history....we have excellent credit, never been late and has always kept a good standing with our creditors...we have established our credit for the past 2 years and now we just wanted to buy the house we wanted. (We are in VA.) Also, what else do we need to give them as far as bk papers? We gave them a copy of our discharge, the same copy we get from PACER,...is there anything else that we are missing?? PLease help!

[newbie2]

There is a difference between pre-qualified and pre-approved. Pre-qualified means the rep at the lenders office looked over things and thinks he/she can get you the loan. Once they shop the loan (either in house if it's a bank, or to banks if it's a mortgage broker) the whole file goes to their underwriting department. The underwriter has the final say on whether the money will be lent or not.

Now, this may not be as bad as you think it is. The underwriter asked about a house included in bankruptcy: That could be because the credit reporting agencies aren't reporting it correctly, or if it was foreclosed upon they need to make sure that the date was past their guidelines (2 years I believe for FHA, but I could be mistaken.) As far as more paperwork, most underwriters want to see the creditor matrix (to see who was discharged, etc.) and perhaps more. Only your lenders rep can tell you what the underwriter will need.

Good luck to you, I hope you can close on your new home.

[tobee43]

newbie2 hit the nail on the head about explaining the difference between the pre-qualified and pre- approved status. it's really important to be clear on that. in the "old" days one could actually shop with an approved mortgage in hand, now, of course we know the banks and lenders are not passing those out anymore.

also, as pointed out, this could be a good thing for you as hopefully your guidelines have been met and the underwriter is just wanting clarification. (they also, the underwriters have much more accountability now a days).

best of luck to you!!!

[mikeymae]

Let me (the husband) clear up some misunderstanding. We have already been through the entire process of prequalified. Also, we have submitted all our documents for the underwriter's review. The initial purpose behind the post was that we were asked to submit some more information concerning over VA loan. Under VA guidelines we are able to purchase a home two years after both the bankruptcy and the foreclosure. The purpose of this post was because we did not know why they wanted a letter explaining why we filed bankruptcy in the first place. After some research, I found out it was protocol. With that in mind, the other thing we are confused about is why they need all our bankruptcies forms. At this time, we gave them the discharge letter from the court system, however, that was not sufficient. We are not sure what else they want. The earlier post made mention that they wanted to see a discharge matrix; I am not sure what that is. Our question is where we go to get this information. Can we get it on PACER? Thanks for the help thus far.

[tobee43]

Let me (the husband) clear up some misunderstanding. We have already been through the entire process of prequalified. Also, we have submitted all our documents for the underwriter's review. The initial purpose behind the post was that we were asked to submit some more information concerning over VA loan. Under VA guidelines we are able to purchase a home two years after both the bankruptcy and the foreclosure. The purpose of this post was because we did not know why they wanted a letter explaining why we filed bankruptcy in the first place. After some research, I found out it was protocol. With that in mind, the other thing we are confused about is why they need all our bankruptcies forms. At this time, we gave them the discharge letter from the court system, however, that was not sufficient. We are not sure what else they want. The earlier post made mention that they wanted to see a discharge matrix; I am not sure what that is. Our question is where we go to get this information. Can we get it on PACER? Thanks for the help thus far.

did you keep a copy of your petition? the underwriter may what to see what actually happened with your old house...(in writting)..i.e. surrendering, short sale, etc. also they most likely want to see how you listed your schedules on the petition, and this is just pure conjecture, as i'm not really certain as to exactly what the reason is. maybe someone out there that has experienced this personally will respond. but, i can see that it may now be a "protocol" when working with clients that filed bk, is my guess. i'm still wishing you the best and hope it just goes through with no glitches. i would also contact your atty that handled your case, you should have rec'd a copy of your petition, your close and your discharge...even if you used pacer.

we have hard copies which i scanned into my computer and then did a back up ...actually a few, just in case in the future i would need a copy of it...as well as both orders that of the discharge and the no asset distribution order.

[StartinOver]

It would seem to me that the details of the bk should be able to stay out of future transactions. Otherwise, what is a fresh start about? Dragging the bk into the underwriting experience going forward is like walking into a palace with a little bit of dog turd on the bottom of your shoe, it stinks!

That alone would make me want to just wait until it's not on the credit report anymore. (But it's unlikely I'll ever buy a house again. I'm already 54, haven't enough $ saved for retirement so paying a mortgage for 30 years into my 80's or 90's is very unappealing idea.)

[tobee43]

It would seem to me that the details of the bk should be able to stay out of future transactions. Otherwise, what is a fresh start about? Dragging the bk into the underwriting experience going forward is like walking into a palace with a little bit of dog turd on the bottom of your shoe, it stinks!

That alone would make me want to just wait until it's not on the credit report anymore. (But it's unlikely I'll ever buy a house again. I'm already 54, haven't enough $ saved for retirement so paying a mortgage for 30 years into my 80's or 90's is very unappealing idea.)

well this type of fresh start unfortunately doesn't help one with their credit ...that's for certain. the bk stays on there for 10 years. many lenders in the old days didn't care much, after a few years they were happy to lend, now, they do care, even when someone has the best credit. to me, it's really just an excuse by the lender and or underwriter, as the OP has good credit now and after all the lender should feel confident since they know they can't file another bk and would be a better risk than many people today. so, i'll be keeping my fingers and toes crossed that everything goes perfect for them and they get the mortgage, it will be one of the first i have personally seen happen since i have joined the forum, with respect to getting a mortgage AFTER bk.

[mikeymae]

So after sending the loan officer the copy of the discharge papers....she wrote us back to ask why it was only 3 pages! She said the underwriter is looking for the 30 pages and up copy of our bankruptcy and I am having a tough time understanding what she meant until I went to pacer and looked at all the documents we have. I realized she must be referring to the Voluntary Petition documents which is about 49 pages long with all the details of the petition. I am hoping this is what the underwriter is looking for so we can move on...it stil bothers me to think that we are asked to submit all these documents 3 days before closing and it doesn't help that tomorrow is a holiday...i am hoping we can still close on the first. So my question now is, when does the 24 mos take effect? After the discharge or after the house has been foreclosed? For the record, we surrendered our house in bk. I know the house did not get sold until later. I guess I am just wanting a peace of mind about this whole thing. I understand people who filed bankruptcy are frowned upon infact a few people asked why we got approved when we filed bk few years ago...not really sure how to go about this, all I know is that , we all can use a second chance...this is ours, we've learned from the past and we are starting to rebuild...and no, we have no other debt outside of this new house we are trying to buy...we paid our car in full and we did apply for credit cards to establish credit but all are paid in full and on time. Thank you for all your responses.

[IamOld]

mikey, for whatever it's worth, these "underwriters" seem ALWAYS to ask for things in the last minute - this at least seems to be normal...they're very inefficient, nitpicky, and...do things in the last minute.

[mikeymae]

mikey, for whatever it's worth, these "underwriters" seem ALWAYS to ask for things in the last minute - this at least seems to be normal...they're very inefficient, nitpicky, and...do things in the last minute.

So can they still stick with the deadline? I mean if it's a major issue concerning documents which I think what he/she is asking is, shouldn't we be given enough time to address it? I guess I am just getting so frustrated by the fact that this will and might hold off closing. Oh well, it is all in God's hands.

[IamOld]

Mickey, that's the thing - it could simply be their usual last minute nitpicking, or the other reason could be them simply NOT actually having done anything with the "file" until now. If you can get your whole file off of PACER, and email that to them as PDF's, then they'll have everything...

IF they really want to do the deal, they can hold to the deadline - BUT - I would say there is a possibility that they'll move the date...I don't want to ruin your weekend :-) BUT honestly only they know...

When you do send them your PDF's, I would simply ask flat out and plainly - are we still going to have closing on the 1st? Of course politely and nicely, but I would ask!!!!

So can they still stick with the deadline? I mean if it's a major issue concerning documents which I think what he/she is asking is, shouldn't we be given enough time to address it? I guess I am just getting so frustrated by the fact that this will and might hold off closing. Oh well, it is all in God's hands.

[tobee43]

So after sending the loan officer the copy of the discharge papers....she wrote us back to ask why it was only 3 pages! She said the underwriter is looking for the 30 pages and up copy of our bankruptcy and I am having a tough time understanding what she meant until I went to pacer and looked at all the documents we have. I realized she must be referring to the Voluntary Petition documents which is about 49 pages long with all the details of the petition. I am hoping this is what the underwriter is looking for so we can move on...it stil bothers me to think that we are asked to submit all these documents 3 days before closing and it doesn't help that tomorrow is a holiday...i am hoping we can still close on the first. So my question now is, when does the 24 mos take effect? After the discharge or after the house has been foreclosed? For the record, we surrendered our house in bk. I know the house did not get sold until later. I guess I am just wanting a peace of mind about this whole thing. I understand people who filed bankruptcy are frowned upon infact a few people asked why we got approved when we filed bk few years ago...not really sure how to go about this, all I know is that , we all can use a second chance...this is ours, we've learned from the past and we are starting to rebuild...and no, we have no other debt outside of this new house we are trying to buy...we paid our car in full and we did apply for credit cards to establish credit but all are paid in full and on time. Thank you for all your responses.

you didn't get a copy of your petition? or keep one when you filled it out, (if you went pro se)?

i have HEARD all different dates being used as what is the exact date they use. i have heard from the time you filed. (that's a BIG no, i promise) i have heard from the time of the close and discharge of your bk, and i have heard from the time if you had a foreclosure, it was from the date of sale of that property. (for us that would mean we never get a mortgage since Chase will never foreclose on our property which we surrendered over 3 years ago and the statue of limitation in that state is 20 years to transfer the deed and ownership).

personally, i think, it's whatever the lender whats it to be. i know there are FHA guide lines that are suppose to say exactly what "date" it is, and someone will chime in with that, however, the VA may hopefully be more lenient and work with you. there are a tremendous amount of people in the pasts 4-5 that filed bk's and now are getting back on their feet. there is so much inventory out there, one would truly hope the bank will work with you on this. i will be keeping my fingers and toes crossed for you. we didn't even attempt it and went for an owner financed property. also, if this house is owned by someone, ask your realtor if a land contract would be possible until you qualified for a mortgage.

[mikeymae]

So I just thought I'd keep you all updated!!!! WE got the house!!!! WOOOOOHHHHOOOOOOHHHOOOOOOOOO...after all the questions and the last minute documents needed from us!!!! We finally closed today at 4pm!!!! I am so happy!!!!!

[ValleYum]

Congratulations! Best of luck to you in your truly new 'Fresh Start'!

[IamOld]

AWSOME!!!!!!!!!!!!!!! Best wishes!