How were you treated when applying for a mortgage after discharge?

[graciemae]

We filed a 13 in 12/04 and are almost done....only 8 payments left. We are going to sell our home in about a year and buy a bigger home but I am worried about how we will be treated by the banks/loan officers when they see the bk on our record. I would like to think that they would remain professional and that they see it all the time but I still can't get past the embaressement of it all and am scared to proceed. I'm assuming we will have to go FHA because of only having about 10% down payment, so qualifying doesn't concern me as much as the humiliation factor.

N~~

[Flamingo]

The banks will look at you to see if you have learned to handle your finances during and after your BK. How you conduct yourself now and how you have conducted yourself through your Plan means a lot. Also, you will have to be able at that time to afford the new mortgage with secure jobs in place and demonstrate financial stability. The BK will raise an eyebrow but it is not the end of the world. It just might mean taking out an FHA loan with PMI if there is less than 20% equity in the home or you could get a conventional loan at a higher rate. Get a good broker who has worked well previously with folks in or out of BK - your BK attorney is a good place to start for references.

[StartingOver08]

... The BK will raise an eyebrow but it is not the end of the world. ... Get a good broker who has worked well previously with folks in or out of BK - your BK attorney is a good place to start for references.

I disagree with Flamingo on parts of her post.

If the loan officer raises an eyebrow - run away, run away fast. That would be your first indication that the loan officer is not a professional. For a loan officer to show surprise at a consumer with a BK would certainly indicate an inexperienced loan officer at best.

As to the BK attorney knowing about loans and financing, that would be an individual thing. Most attorney's do not get involved in financing, their expertise is in the BK field (or whatever legal field in which they practice). Get your recommendations from people you know in the area that have recently obtained loans and have been satisfied with their originator.

[graciemae]

I think we've conducted ourselves well, we have midscores of around 680 as of 2 months ago and we have been using a surviving credit card and paying the balance off montly for around a year now. We are current, and always have been, on our first mortgage and our student loans. We are able to save, albeit a small amount, every month and once our last plan payment of $1300 is made we will be banking that amount every month until we sell. My husband has been at the same job for 9 years, and while no job is secure, we have no reason to believe that his job security will change abruptly; I don't work outside of the home but I do provide childcare from my home for income. I think we can present ourselves as model post BK mortgage candidates........atleast I hope so.
Thanks for the responses.

N~~

[Logan]

I disagree with Flamingo on parts of her post.

If the loan officer raises an eyebrow - run away, run away fast. That would be your first indication that the loan officer is not a professional. For a loan officer to show surprise at a consumer with a BK would certainly indicate an inexperienced loan officer at best.

As to the BK attorney knowing about loans and financing, that would be an individual thing. Most attorney's do not get involved in financing, their expertise is in the BK field (or whatever legal field in which they practice). Get your recommendations from people you know in the area that have recently obtained loans and have been satisfied with their originator.

Who gives a crap if someone 'raises an eyebrow'? I've been turned down or told by some people they can't get me a loan but who fricking cares? You've got to understand that it is their loss not ours because if it makes sense you will find credit!

A year and a half ago I was looking for an apartment in South Beach and my criteria included a place that would allow a big dog and it had to have a washer and dryer. I was also looking for a 'nice' place that was relatively new and it had to have parking.

You would not believe the number of real estate agents that would 'raise an eyebrow' when I told them what I was looking for. They said it would be very difficult to find what I'm looking for and some were just outright rude.

I look at it in a different way. Since I had to have a washer and dryer, parking and I have an 80lbs dog you could automatically narrow the number of places down right off the bat. Instead of hundreds of potential places to rent it's now down into the double digits. If that doesn't make a real estate agents job easier I don't know what does?

Getting a loan out of BK is the same way. There are only so many programs available such as FHA, USDA and portfolio lending. A loan officer either wants this challenge or they don't. Screw the RAISE AN EYEBROW A$$E$ and find the people willing to work with you because they are out there!!!!

Please stop lowering our expectations!!!!!

Good Luck,

Logan


BTW...I found a rental on the 14th floor of a very nice high rise and I'm currently looking at the ocean as I type. My dog is asleep in the other room and my girl friends car is pooling out of the garage right about now. I even have 2 parking spots and I'm paying considerably less than the going rate. I've even had offers to rent out the 2nd parking spot for $100 a month.

If you don't think it can be done then it won't!!!

[HHM]

It's not so much about lowering expectations, its more about being realistic.

[oldhack]

I never had face-to-face contact with ANY of the folks who put together my mortgage which closed in March, less than 2 months after discharge, so if anyone raised an eyebrow it wasn't in my presence.
I used a loan broker headquartered c. 50 miles away, and we interacted entirely by telephone, mail/UPS, and internet. He dealt with the lender. I met only the inspector and termite guy (both of whom I hired) and one of the two appraisers.
The broker was positive he could complete the loan from the first time I talked to him. His chief interests were my FICO scores, my employment history, on-time payment history, and ability to afford close. Once he learned none of those was a problem, his attitude throughout was, "Yeah, we'll get this done!"
He was right.

[Logan]

It's not so much about lowering expectations, its more about being realistic.

HHM,

You have to meet the criteria and you must find the lenders that know the criteria. The lenders have boxes to fill and you want the lender that will take the circle and fit it into the square box.

Logan

[StartingOver08]

HHM,

You have to meet the criteria and you must find the lenders that know the criteria. The lenders have boxes to fill and you want the lender that will take the circle and fit it into the square box.

Logan

Logan, I am agreeing with you! Maybe I didn't state my POV correctly. But your post certainly was what I was trying to say. As you point out, not all loan officers have the knowledge and ability, its up to us to find one that does.

[imoverit]

I never had face-to-face contact with ANY of the folks who put together my mortgage which closed in March, less than 2 months after discharge, so if anyone raised an eyebrow it wasn't in my presence.
I used a loan broker headquartered c. 50 miles away, and we interacted entirely by telephone, mail/UPS, and internet. He dealt with the lender. I met only the inspector and termite guy (both of whom I hired) and one of the two appraisers.
The broker was positive he could complete the loan from the first time I talked to him. His chief interests were my FICO scores, my employment history, on-time payment history, and ability to afford close. Once he learned none of those was a problem, his attitude throughout was, "Yeah, we'll get this done!"
He was right.

Do tell how you were able to get a mortgage so quickly? Were there special circumstances? i would love to hear your details!

[Logan]

Logan, I am agreeing with you! Maybe I didn't state my POV correctly. But your post certainly was what I was trying to say. As you point out, not all loan officers have the knowledge and ability, its up to us to find one that does.

No disagreement, I just want people reading this board who don't know any better that once your BK is seasoned and you've reestablished credit then getting a loan is really no big deal.

Make sure you find a GOOD loan officer. Remember, they don't make money if they don't close the loan so if they blow you off it's because they DON'T know how to close the loan.

Logan

[oldhack]

Do tell how you were able to get a mortgage so quickly? Were there special circumstances? i would love to hear your details!

Details are here:

http://www.bkforum.com/showthread.php?t=35631

About the only 'special circumstance' was that I brought the deal to the table, since it was an arm's-length contract with an acquaintance. But that didn't shorten the mortgage application period, just the house-shopping part.