Our update:
We are almost 3 years post Bk7 discharge. Life is good - we have had no trouble getting a car loan and credit cards (to rebuild credit only). BUT, and this is a big BUT, we held on to our home after the Ch7BK even though it was discharged. As long as we made the payment, the bank did not care. We just went through the home loan process (detailed below) and our scores are 680+ on all. (We had actually 2 homes go to foreclosure in 2 states, over $120,000 in consumer debt/medical, etc. - almost 1/2 million total debt BK7 discharged, new laws.)
As it happened, we got transferred and could not sell the home (even though we did not have to), so 2 years after the Ch7 discharge, our home went to foreclosure. This did NOT come on as a separate public record on our credit report, as it was included in our BK. So that part is good. (There has been controversy that people believe it WILL be a separate public record, as is usually the case in foreclosure in general. But once the home is included in BK, and then foreclosed, there is NOT a separate public record.) We did not legally owe the money, so it was not "our" foreclosure -home had already been discharged. Although if we continued to make the payment, the bank didn't want the house AND we could have sold it and kept any equity, had that been possible. Very confusing to some, I know.
Regarding that home: When we realized we were moving, we stopped making the payments. It took 5 months for the bank to initiate F/C proceedings, and the sheriff's sale did not happen until month 8. So after having a home included in BK, "flagged" as such within the major bank, it still took 8 months before we would have had to move out. (We moved to another state, so left in month 6.)
However, as to getting a mortgage, you can get an FHA loan after 2 years from discharge. UNLESS, you have a foreclosure included. In that case, you can get an FHA home loan 3 years after the date the home went to the bank and changed hands. (Not when the bank sold it to the new owners.) My former career was in this industry, so I have personal knowledge plus we have worked with 3 different lenders to see if the answer would be different. All 3 said we had amazingly great credit rebuild since BK and had we not been honest about the foreclosures, it might have made it through. (The one f/c mortgages were deleted off our credit reports due to incorrect reporting, and the most recent one shows as 'IIB' except for one, and it says "IIB, home in foreclosure" in the small writing.
We refuse to lie and told the truth. I highly recommend that, btw. You never know when someone will check at the last minute, and you might be sitting at a closing table NOT closing and with no where to live.
So, we are 3 years after Bk7 discharge but only 1 year from the foreclosure. So, we have 2 years left to go before we qualify for a home loan. No exceptions or special circumstances are in play in today's climate.
To recap:
*2 years from BK discharge
*3 years from date your home changed hands in foreclosure (for most people that give their home up in the BK, that will likely be a few months after discharge, max.) We "stupidly" hung on, thinking we could make it. And for that, we will wait almost 5 years to qualify for a home loan.
It's ok, though, as we have had no trouble renting an amazing home and love it here. There is definitely life after BK, and although I was one of the most mortified people that ever went through this process, we almost divorced, it was tough to hold it all together. BUT, it was worth it and we have taken our "fresh start" and run with it. No new debt except a small car loan, which we got 6 months after discharge with 5.75% interest!! The car payment on our credit score has helped tremendously!!
Had we not had the F/C, or had we given the home up with the BK 7 at discharge, we would be almost at that 3 year mark. Based on our current credit scores, the banks were tripping over themselves offering us 30 or 15 year loan (we wanted the 15 yr) for $200,000 at 4.75% for the 15 year, and 5.25% for the 30 year fixed. Our application, as a matter of fact, made it through automatic underwriting at all 3 lenders. It was only when we discussed the foreclosures that they had to speak with their underwriters personally and none were willing to touch it. None of the 3 had caught the foreclosure from the credit report OR the fact that we included that info on our applications. Strange indeed!
Good luck to all - you will make it to the other side.
We are almost 3 years post Bk7 discharge. Life is good - we have had no trouble getting a car loan and credit cards (to rebuild credit only). BUT, and this is a big BUT, we held on to our home after the Ch7BK even though it was discharged. As long as we made the payment, the bank did not care. We just went through the home loan process (detailed below) and our scores are 680+ on all. (We had actually 2 homes go to foreclosure in 2 states, over $120,000 in consumer debt/medical, etc. - almost 1/2 million total debt BK7 discharged, new laws.)
As it happened, we got transferred and could not sell the home (even though we did not have to), so 2 years after the Ch7 discharge, our home went to foreclosure. This did NOT come on as a separate public record on our credit report, as it was included in our BK. So that part is good. (There has been controversy that people believe it WILL be a separate public record, as is usually the case in foreclosure in general. But once the home is included in BK, and then foreclosed, there is NOT a separate public record.) We did not legally owe the money, so it was not "our" foreclosure -home had already been discharged. Although if we continued to make the payment, the bank didn't want the house AND we could have sold it and kept any equity, had that been possible. Very confusing to some, I know.
Regarding that home: When we realized we were moving, we stopped making the payments. It took 5 months for the bank to initiate F/C proceedings, and the sheriff's sale did not happen until month 8. So after having a home included in BK, "flagged" as such within the major bank, it still took 8 months before we would have had to move out. (We moved to another state, so left in month 6.)
However, as to getting a mortgage, you can get an FHA loan after 2 years from discharge. UNLESS, you have a foreclosure included. In that case, you can get an FHA home loan 3 years after the date the home went to the bank and changed hands. (Not when the bank sold it to the new owners.) My former career was in this industry, so I have personal knowledge plus we have worked with 3 different lenders to see if the answer would be different. All 3 said we had amazingly great credit rebuild since BK and had we not been honest about the foreclosures, it might have made it through. (The one f/c mortgages were deleted off our credit reports due to incorrect reporting, and the most recent one shows as 'IIB' except for one, and it says "IIB, home in foreclosure" in the small writing.
We refuse to lie and told the truth. I highly recommend that, btw. You never know when someone will check at the last minute, and you might be sitting at a closing table NOT closing and with no where to live.
So, we are 3 years after Bk7 discharge but only 1 year from the foreclosure. So, we have 2 years left to go before we qualify for a home loan. No exceptions or special circumstances are in play in today's climate.
To recap:
*2 years from BK discharge
*3 years from date your home changed hands in foreclosure (for most people that give their home up in the BK, that will likely be a few months after discharge, max.) We "stupidly" hung on, thinking we could make it. And for that, we will wait almost 5 years to qualify for a home loan.
It's ok, though, as we have had no trouble renting an amazing home and love it here. There is definitely life after BK, and although I was one of the most mortified people that ever went through this process, we almost divorced, it was tough to hold it all together. BUT, it was worth it and we have taken our "fresh start" and run with it. No new debt except a small car loan, which we got 6 months after discharge with 5.75% interest!! The car payment on our credit score has helped tremendously!!
Had we not had the F/C, or had we given the home up with the BK 7 at discharge, we would be almost at that 3 year mark. Based on our current credit scores, the banks were tripping over themselves offering us 30 or 15 year loan (we wanted the 15 yr) for $200,000 at 4.75% for the 15 year, and 5.25% for the 30 year fixed. Our application, as a matter of fact, made it through automatic underwriting at all 3 lenders. It was only when we discussed the foreclosures that they had to speak with their underwriters personally and none were willing to touch it. None of the 3 had caught the foreclosure from the credit report OR the fact that we included that info on our applications. Strange indeed!
Good luck to all - you will make it to the other side.
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