early removal of 7 and 13 from the three credit bureaus

[crabbman]

Hello, I understand.
I feel good.
Good day.
Thanks again

[justbroke]

If you have only one bankruptcy on your credit report, then your case was likely just filed as a Chapter 7 to start with (never converted). This means that the attorney first thought that you would file as a Chapter 13, but changed it to a Chapter 7 before it was filed. If the Chapter 7 was later dismissed, then you follow the rules for a dismissal for a conventional (FNMA) mortgage. That period of time is 4 years from the date of dismissal. You will need to explain the reasons (as the lender will want a letter of explanation).

[crabbman]

Hello, there is nothing listed on the bankruptcy forms as being converted.
yes it says dismissed.
i did not not know anything about reaffirmation agreement and my lawyer never told me anything about it.
I understand why there is no mortgage listed on all my credit reports.
just trying to get verification on where i stand on the four or seven year conventional loan refinance.

[justbroke]

It sounds like it was a converted case.

There is no way to keep your mortgage listed on your credit report if you discharged the debt in the Chapter 7 and did not file a reaffirmation agreement. There is no reason to reaffirm a mortgage especially just for credit reporting. (There is a very limited reason in some districts where smaller lenders will force the debtor to choose one of the three options -- redeem, surrender, reaffirm.)

If your case was converted, and not just a Chapter 13 filed and dismissed and refiled as a Chapter 7, then you only have one filing date and one dismissal date.

[crabbman]

thank you. i had a lousy lawyer.
he told me we will do chapter 13 and then at the last moment said we cannot do this and then moved into chapter 7. Does this mean yes it was a converted case?
he also forgot to ask to keep my mortgage listed on my credit reports. i did not know this was possible so i did not ask,
so you are saying i do have to wait seven years to get conventional?

[justbroke]

Also, I'm concerned that you had a Chapter 13 and then a Chapter 7. Was that a converted case or did you dismiss and refile. If it's the latter -- you dismissed the 13 and refiled a 7 -- then you won't be able to obtain a conventional loan for 7 years from the date of the discharged/dismissed Chapter 7. FHA will treat you a better for multiple bankruptcies within 7-years of application.

[crabbman]

i UNDERSTAND
THANK YOU

[justbroke]

What is the difference in discharged and dismissed?

A dismissal may carry a heavier penalty when it comes to a.) recovering your credit score, and b.) obtaining mortgage products.

For mortgage products a dismissal is different based on the chapter of bankruptcy.

• FNMA (Conventional)
  • BK Chapter 7, 4-years from dismissal or discharge measured date of discharge/dismissal.
  • BK Chapter 13, 2-years from discharge date, 4-years from dismissal date.
  • Extenuating circumstances could reduce this to 2-years, but it very difficult to prove.
  • Multiple filings within 7-years will keep the debtor from obtaining FNMA for 7 years with no exceptions, and is measured from the latest dismissal/discharge date.
• FHA
  • BK Chapter 7, 2-years from the discharge/dismissal date
  • BK Chapter 13, just 12-months while in an active Chapter 13 (with on-time payments to the trustee)

i want to refinance in Sept. 4, 2023. i do not have a lock on conventional mortgage as someone said here earlier. How does that even come about? Who determines who gets a lock on Conventional Mortgage?

I think shipo was talking about being unable to obtain an FNMA (conventional) mortgage if you have a foreclosure. Otherwise a conventional mortgage is not available to those who have a discharge/dismissal in a Chapter 7 for 4-years... just as you calculated. That 9/4/2023 date would be the first date that you could apply for a conventional mortgage.

You also have access to FHA loans. FHA loans have a maximum LTV of $420,680 in most places (with higher values for expensive locations like Hawaii, San Francisco, etc).

I also want to purchase a lot in my neighborhood and build a home and turn around and sell. Not sure on the timing of these two financial transactions- Refinance and Purchase of lot/home?

That would be called an investment property. That is going to have a bunch of different terms should you need a loan. You won't be able to do that with an FHA and would need a conventional product (such as Fannie Mae -- FNMA, or Freddie Mac -- FHMLC). The down payment, credit score, and reserve requirements are more stringent for investment.

Unless you have equity in your primary home, getting money to purchase and build on a lot that's not your primary home, will be challenging.

[crabbman]

I don't believe that your strategy is going to work for you. Mortgage companies issuing mortgages from the GSEs (Government-Sponsored Entities) -- Fannie Mae, Freddie Mac -- or even portfolio lenders are going to want a tri-merge report issued by Factual Data, CREDCO, or one of the other mortgage tri-merge aggregators. They are also going to pull SageStream or LexisNexis... and/or something else.

Additionally, it could be mortgage fraud to not be forthcoming, on your Universal Residential Loan (Mortgage) Application form. On that form 1003, you must disclose a prior bankruptcy in the last 7 years, or a foreclosure in the last 7 years. There are also other mandatory disclosures. I sympathize with you because even though you may be able to get it off your credit report, you must still disclose it. As soon as the desktop underwriting system (DU, GUS, Loan Prospector, etc.) sees that box checked for a bankruptcy, the loan will go into a manual review, or go from approve/eligible to approve/caution (or some other finding that is specific to the loan program).

Those are the rules unless you have extenuating circumstances or could look to a non-QM (non-qualified mortgage) or portfolio lender who do Day 1 "event" mortgages and refinances.

Personally, I would probably not go down the rabbit hole of trying to get the bankruptcy removed as there are many sources for that public data. Especially if you live in the same home where you lived when you filed bankruptcy. Let me tell you... these underwriters are impressive with their detective skills.

You may need to look to those non-QM mortgages and/or portfolio lenders. They typically have higher rates and higher LTV (loan-to-value) offerings. Most of those types of lenders also restrict any cash-out, so if you're looking for cash, that could be problematic as well.

Thnk you Justbroke. I have a split mortgage- 1st at 4.25%, 53000
2nd at 4.65%-320000
40 year mortgage for i refinanced in 2014 and had all fees and expences put onto the rear end of payment table which created a very long term.
i want to refinance in Sept. 4, 2023. i do not have a lock on conventional mortgage as someone said here earlier. How does that even come about? Who determines who gets a lock on Conventional Mortgage?
I also want to purchase a lot in my neighborhood and build a home and turn around and sell. Not sure on the timing of these two financial transactions- Refinance and Purchase of lot/home?
Thank you.

[shipo]

Your dismissed Chapter 13 means, for all intents and purposes, it didn't happen and all protections afforded by the bankruptcy ceased; fortunately your Chapter 7 took up most (or all depending upon your case) of the slack. What this means is your Chapter 7 will drop off your reports in roughly August of 2029, assuming you don't successfully land an EE.

[crabbman]

Thank you Shipo
I understand
My Chapter 13 is dismissed. Sept. 4, 2019
My Chapter 7 is discharged Sept. 4, 2019
What is the difference in discharged and dismissed?

[shipo]

Thank you Shipo. i do not understand the CRA early exclusion, the TU, 3-month for EX, and five minutes for EQ, and the EE period.

The term "Early Exclusion" (aka. EE) means the CRAs are often willing to drop bankruptcy and other derogative items from an individual's credit report before the 7-year or 10-year (depending upon the derog) point has been reached. Based upon numerous reports I've read, the following *MAY* be granted for a Chapter 7 bankruptcy:

• TransUnion: they may be willing to drop the public record of the bankruptcy after 9 years and 6 months from filing date.
• Experian: they may be willing to drop the public record of the bankruptcy after 9 years and 9 months from filing date.
• Equifax: they virtually never drop any derogative items early, hence my "tongue firmly planted in cheek" comment of 5 minutes early.

In my case, even though I was theoretically eligible for EE as early as last July, since I had exactly zero need for any new credit, I opted to let my Chapter 13 fall off organically after the 7 year point had reached; Experian dropped my bankruptcy off my record after 6 years and 11 months, TransUnion and Equifax both dropped at 7 years. Once again, in my case, my FICO scores shot up nearly 100 points on average; some of them climbing nearly 150 points.

[justbroke]

flashoflight I think that crabbman wrote that this was a dismissal. That means the 4 year wait is the default unless there are extenuating circumstances. From what I was told, that extenuating circumstances for FHA means death of a wage earner or worse. It is rare to get approval under an extenuating circumstances exception... unless the lender is passing dirty files to FHA.

The conventional lockout of 7 years only happens if the mortgage was not included (discharged) in the Chapter 7 bankruptcy. Otherwise there is an exception to that 7-year foreclosure rule. If the mortgage that was foreclosed was discharged in a bankruptcy, then the bankruptcy period may be applied by the lender. (You have to find a lender willing to mark the foreclosure with a special comment that will ignore the foreclosure.)

[flashoflight]

Thank you just broke. yes i really need a re-finance on my home mortgage. i have a chapter seven so the rules are i need to wait four years from dismissal. my date is Sept. 4, 2023
also trying to increase my credit file as i only have five debts
i do understand the freezing. i am in financial jail untill Sept. 4, 2023
appreciate the help!

You can do FHA two years out of a 7 or 12 months after starting the 13 plan. FHA doesn't have the most fantastic rates after factoring in the MIP, but given you have a bankruptcy it's not that bad when compared to investor property mortgages with good credit or a lower credit conventional with a cashout. I was bummed that I'm locked out of conventional for 7 years, but I took what I could get last year with FHA and am glad I did before rates shot up. Think of it another way --- last year when 30 year rates on conventional were 2.8%, the investor property folks would jump at the chance of taking 3.75% or 4% even though it sounds high. That's a very, very good rate for a non-owner-occupied and best part is that it's fixed for 30 years. Of course all of this doesn't matter if your current mortgage is 4% or less due to the rates shooting up lately.

[crabbman]

I don't believe that your strategy is going to work for you. Mortgage companies issuing mortgages from the GSEs (Government-Sponsored Entities) -- Fannie Mae, Freddie Mac -- or even portfolio lenders are going to want a tri-merge report issued by Factual Data, CREDCO, or one of the other mortgage tri-merge aggregators. They are also going to pull SageStream or LexisNexis... and/or something else.

Additionally, it could be mortgage fraud to not be forthcoming, on your Universal Residential Loan (Mortgage) Application form. On that form 1003, you must disclose a prior bankruptcy in the last 7 years, or a foreclosure in the last 7 years. There are also other mandatory disclosures. I sympathize with you because even though you may be able to get it off your credit report, you must still disclose it. As soon as the desktop underwriting system (DU, GUS, Loan Prospector, etc.) sees that box checked for a bankruptcy, the loan will go into a manual review, or go from approve/eligible to approve/caution (or some other finding that is specific to the loan program).

Those are the rules unless you have extenuating circumstances or could look to a non-QM (non-qualified mortgage) or portfolio lender who do Day 1 "event" mortgages and refinances.

Personally, I would probably not go down the rabbit hole of trying to get the bankruptcy removed as there are many sources for that public data. Especially if you live in the same home where you lived when you filed bankruptcy. Let me tell you... these underwriters are impressive with their detective skills.

You may need to look to those non-QM mortgages and/or portfolio lenders. They typically have higher rates and higher LTV (loan-to-value) offerings. Most of those types of lenders also restrict any cash-out, so if you're looking for cash, that could be problematic as well.

Thank you Just Broke for direction.
Yes i will follow direction to stop my work for removal from credit reports.
What will my chances look like to refinance Sept.4, 2023?
I have been told i will be a candidate to apply at this date!
Yes this early application for mortgage looks real sketchy to me. no thanks.
Good day