Buying a house after Bankruptcy

[denisec]

reply to marcer

Hi marcer, I am pretty sure that I have to wait for 3 years after sale of my property...
Bank of America hasn't even sent me a NOD yet after 2.5 years of nonpayment. My BK & was discharged 7/09 with mortgages, but no foreclosure yet, so I understand with FHA it will be another 3 years after sale date..so I am looking to rent now..Once I am in a rental, I would like to see if there's a way to speed up their foreclosure, but it seems like BofA, and my mortgage was originally with Countrywide, if really slow on proceeding with many of these deals....

[marcer]

Hi marcer, I am pretty sure that I have to wait for 3 years after sale of my property...
Bank of America hasn't even sent me a NOD yet after 2.5 years of nonpayment. My BK & was discharged 7/09 with mortgages, but no foreclosure yet, so I understand with FHA it will be another 3 years after sale date..so I am looking to rent now..Once I am in a rental, I would like to see if there's a way to speed up their foreclosure, but it seems like BofA, and my mortgage was originally with Countrywide, if really slow on proceeding with many of these deals....

Denisec~ I hate to be the bearer of bad news...so i won't. The discharge date of your mortgage through bk7 is the seasoning date. Many times, the bank will continue to report on your credit report as being late and this will require the lender to obtain a supplement to credit report showing no late payments past discharge. I see this often and can assure you that many borrower have acquired a new home after bk when home was included

[denisec]

Here's the deal Marcer...DATE of DISCHARGE Including BoA first and second mortgages date: 7/09
Still no foreclosure on home, so foreclosure will happen AFTER the discharge...
Everything I have been told so far tells me that I still have to wait for FHA loan 3 years after foreclosure or auction sale date since the foreclosure will happen AFTER the BK?
Are you telling me that this is wrong? I would love it if I could start applying for FHA loan in 2012, and not have to rent. How do you know? And are you a lender or?
My credit is around 672, and both mortgages are reporting 0 balances and haven't reported since the discharge. I have no other debt, but have gotten a few credit cards that I have been paying timely on.
What happens when the lender sees that I have my name on a deed to this house when I apply for another mortgage?

[denisec]

HI marcer, one more thing my BoA loans are not FHA but conventional....I did have a FHA loan before on my first home which was all totally fine...everything paid on time, sold for a good profit, no issues. I would love to get another FHA loan, if I can figure out if I can get a loan with 3 years after the Discharge and not after the foreclosure whenever that will happen? My credit has been perfect before the BK and since discharge...I paid off my student loan just last month..have 3 credit cards since discharge, and one used car loan paid off since discharge...I now have a total of $500 balance on a $2,000 Capital One master card, and stable job at $77k a year and in same job since 2006...
So if you have any good ideas on how to apply for new loan after my 3 years post discharge date...please let me know. If that's the case I would just as soon stay in this house, save a bit more and then purchase..Although I am still not sure..since
everyone else tells me I can't get a loan if I still have this home in my name, and need more seasoning post the auction sale...Please Advise.

[marcer]

Yes you can

HI marcer, one more thing my BoA loans are not FHA but conventional....I did have a FHA loan before on my first home which was all totally fine...everything paid on time, sold for a good profit, no issues. I would love to get another FHA loan, if I can figure out if I can get a loan with 3 years after the Discharge and not after the foreclosure whenever that will happen? My credit has been perfect before the BK and since discharge...I paid off my student loan just last month..have 3 credit cards since discharge, and one used car loan paid off since discharge...I now have a total of $500 balance on a $2,000 Capital One master card, and stable job at $77k a year and in same job since 2006...
So if you have any good ideas on how to apply for new loan after my 3 years post discharge date...please let me know. If that's the case I would just as soon stay in this house, save a bit more and then purchase..Although I am still not sure..since
everyone else tells me I can't get a loan if I still have this home in my name, and need more seasoning post the auction sale...Please Advise.

Again, I do not know who everyone is, but there is a bit of bad information from good intentions. I will say as i have said before and for how many more times you may ask me, the answer is "YES YOU CAN" You only need 2 years post bk and with established credit. If BOA hasn't sold your home yet...tough on them. This will not, will not, will not hurt you. Obviuosly there are other conditions which may impact you, but it will not be the BOA mortgages.

[denisec]

Again, I do not know who everyone is, but there is a bit of bad information from good intentions. I will say as i have said before and for how many more times you may ask me, the answer is "YES YOU CAN" You only need 2 years post bk and with established credit. If BOA hasn't sold your home yet...tough on them. This will not, will not, will not hurt you. Obviuosly there are other conditions which may impact you, but it will not be the BOA mortgages.

Thanks for the info Marcer...you give me a new thread of hope...I will start trying to get preapproved..I tried eloans about a year ago just to see what would happen ( I knew it was too early) one lender only replied and told me I had to wait 3 years from discharge date...although I didn't get any details...anyway will try again soon...and may just stay here and save some more money in the mean time...BTW you sound like a mortgage broker with all your knowledge, is that the case?

[tradinglife]

It seems like it depends on who you talk to whether lenders go by discharge date or foreclosure date. I plan to test the waters on the 2 yr date of my BK discharge, and see what happens. Surely as many people that are on the sidelines right now that are in this situation something will come up as an option. News stories keep talking about the increase in renters versus owners, most report this news as people choosing to rent versus buying. I think a big part of recent renters like my self would prefer to buy. I hate writing that rent payment every month, feel like it is a waste of money.

[marcer]

It seems like it depends on who you talk to whether lenders go by discharge date or foreclosure date. I plan to test the waters on the 2 yr date of my BK discharge, and see what happens. Surely as many people that are on the sidelines right now that are in this situation something will come up as an option. News stories keep talking about the increase in renters versus owners, most report this news as people choosing to rent versus buying. I think a big part of recent renters like my self would prefer to buy. I hate writing that rent payment every month, feel like it is a waste of money.

I hope this will help people understand my messages earlier and on another post here. BK and Foreclosure are two separate legal options. One is for the role of debtor and the other is for creditor. Ch. 7 allows a debtor to seek relief from his/her creditor. Once the BK has been accepted and discharged, the debtor is absolved against future damages the creditor may experience. Foreclosure is for the role of creditor. This allows the creditor to take back property and sale the asset to recoup any and all losses. Previously, any loss taken by the lender could be passed on to the debtor in the form of income for which he/she would be required to include to the IRS.

Additionally, the lender could seek relief from you for losses taken. In 2007,8, or 9, The foreclosure and short sale act allowed for a borrower to obtain relief from claiming lenders loss as income, and to have lenders seek additional damages in the future-------You can look it up on the IRS webpage..I may be leaving these out, but this is the basic premise. Now...with BK, there is no future damages, hence the date the lender sells the property is never a question. If you have received differently from a lender...run and don't look back.

To be fair, many brokers, also known as mortgage bankers, have additional overlays to the guidelines of the investor. Where FHA requires a minimum 500 credit score to obtain a loan ******with strong compensating factors***** many lenders will not allow for less than 640 and some are as high as 680. This is called an overlay. An overlay is where a lender will add additional qualifiers to mitigate any risk and make the loan more attractive for purchase. Soooooo....where FHA has clear guidance on BK vs.. Foreclosure, the lender to which you are speaking with may have their own overlay which lumps the two together or takes the worst case such as date of sale for property.

BTW: Mortgage brokers/bankers are not bad. I'm not suggesting in anyway that someone not use them just because they are not a banker. I've been on both ends and both sides have their pros and cons.

In closing.....BK seasoning is needed when mortgage is discharged through BK. Date of sale or for some lenders date of reconveyance is needed on foreclosure or short sale with adverse mortgage history. I have another post under FHA which goes into greater detail.

As for renting versus buying...depends. Seattle has an index of 21. This is high and would suggest renting. I disagree only because rates are low, home prices are low, and rents continue to increase. Good luck and happy hunting.

[denisec]

Marcer...A different question but related to mortgages included in discharge...When I apply for an FHA loan, will the lender tend to ask for VOM...and require proof of the last 12 months payments? I will have to give the address for the same house that is included in the bk, and have not paid for over 2 years....Thanks, just trying to anticipate any issues..As you have gathered on prior posts, these mortgages were discharged 7/15/09 ( so i of course won't try until 3 years later..in '12), and have shown 0 balances and no reporting since discharge. Doesn't seem logiical that they should require VOM, but who knows?

[marcer]

Marcer...A different question but related to mortgages included in discharge...When I apply for an FHA loan, will the lender tend to ask for VOM...and require proof of the last 12 months payments? I will have to give the address for the same house that is included in the bk, and have not paid for over 2 years....Thanks, just trying to anticipate any issues..As you have gathered on prior posts, these mortgages were discharged 7/15/09 ( so i of course won't try until 3 years later..in '12), and have shown 0 balances and no reporting since discharge. Doesn't seem logiical that they should require VOM, but who knows?

Mortgage included in discharge requires 2 years only. Technically, you could have started pursuing fha financing 07/2011. You do not need the 3 years.

Yes, You would be required to show proof of either rental or mortgage history. The fact that you've remained in the same home which you discharged through chapter 7 is puzzling. Why did you?

All lenders will require re-established tradelines post bk. For limited credit post bk, FHA will allow for alternative tradelines from two groups.

Group1: would include---pay here auto loan. Rental history documented by either 12 mos. cancelled checks or VOR from 3rd party management company and others

Group 2: would include ---utility reference, insurance reference and others

Need at least one group 1 and two from group 2.

I am a lender and have been for 17 years

[denisec]

Mortgage included in discharge requires 2 years only. Technically, you could have started pursuing fha financing 07/2011. You do not need the 3 years.

Yes, You would be required to show proof of either rental or mortgage history. The fact that you've remained in the same home which you discharged through chapter 7 is puzzling. Why did you?

All lenders will require re-established tradelines post bk. For limited credit post bk, FHA will allow for alternative tradelines from two groups.

Group1: would include---pay here auto loan. Rental history documented by either 12 mos. cancelled checks or VOR from 3rd party management company and others

Group 2: would include ---utility reference, insurance reference and others

Need at least one group 1 and two from group 2.

I am a lender and have been for 17 years

Ok there's the rub, I knew there was one somewhere..Looks like I will have to go rent for a year before I can get financing...Why did I stay in the home? Because I saved money to get on my feet, paid off my student loan and got solvent, now I am debt free..and have some savings....
As you know, foreclosures are taking years, and I don't even have a NOD yet...but looks like I have to go get a rental like NOW!

[denisec]

Mortgage included in discharge requires 2 years only. Technically, you could have started pursuing fha financing 07/2011. You do not need the 3 years.

Yes, You would be required to show proof of either rental or mortgage history. The fact that you've remained in the same home which you discharged through chapter 7 is puzzling. Why did you?

All lenders will require re-established tradelines post bk. For limited credit post bk, FHA will allow for alternative tradelines from two groups.

Group1: would include---pay here auto loan. Rental history documented by either 12 mos. cancelled checks or VOR from 3rd party management company and others

Group 2: would include ---utility reference, insurance reference and others

Need at least one group 1 and two from group 2.

I am a lender and have been for 17 years

As far as other tradeline i have 3 credit cards post bk, a used auto loan paid off, and student loan paid off...perfect credit since discharge, problem will be lack of rental history post bk, so looks like that's the next step.there's a decent rental house coming on the market soon, so I am going to try for that ...

[marcer]

Ok there's the rub, I knew there was one somewhere..Looks like I will have to go rent for a year before I can get financing...Why did I stay in the home? Because I saved money to get on my feet, paid off my student loan and got solvent, now I am debt free..and have some savings....
As you know, foreclosures are taking years, and I don't even have a NOD yet...but looks like I have to go get a rental like NOW!

That is the rub. Sorry to present you with bad news. I completely understand your reasons for continuing to live in the home psot bk. Forget about the foreclosure and NOD. They cannot foreclose or issue you a Notice of Default since your obligation was ended through your bk. You don't owe anything and there is no one to foreclose on. The bank was awarded the property back once you discharged. You have a bk only and NOT a foreclosure :-) If you are able, find an affordable rental and get into it for a year. Pay your insurance and all utilities on time. When the time comes, plan on purchasing a home with PITI payments no greater than 125% of what you will be paying in rent. I would recommend 110-15%

[marcer]

As far as other tradeline i have 3 credit cards post bk, a used auto loan paid off, and student loan paid off...perfect credit since discharge, problem will be lack of rental history post bk, so looks like that's the next step.there's a decent rental house coming on the market soon, so I am going to try for that ...

Missed this post, sorry. You may be okay...seriously. Rental history is very important, but may be overlooked with other factors. We see many 1st time home buyers choosing to live with mom and dad in order to save up. I know this isn't the case with you, but you may be able to get around the rental requirement. See my other post on basic information needed.

[denisec]

Missed this post, sorry. You may be okay...seriously. Rental history is very important, but may be overlooked with other factors. We see many 1st time home buyers choosing to live with mom and dad in order to save up. I know this isn't the case with you, but you may be able to get around the rental requirement. See my other post on basic information needed.

Thanks Marcer, I wish I talked to you earlier, I have been so confused with all the different answers, i even talked to an FHA rep and a mortgage broker..anyway water under the bridge..so it looks like I could just be given a notice to vacate this house, since Bank of America doesn't have to go through the normal foreclosure process, talk about "ignorance is bliss', as I have been sitting in this house not knowing I could be kicked out at any time. I was thinking the process was NOD and then around 4 months but looks like that was not correct..yikes..would I get some kind of notice before that happens? Or would I get a sale date for the house? Now I am a bit worried...This was a Countrywide loan that went BoA, and you know the mess that has been, perhaps that is why the delay?