CH7 and wait? Is it really 2 yrs?

[gophermn]

I have read several times for those of who filed CH7 we must wait 2years before we can even think about re-applying for a mortgage, refi, etc.. If my discharge was 04/2008 when do you think I can begin looking for a new home? Would the lenders be willing to begin my loan process earlier in the 2010 year and perhaps close a month or two before my 2year engagement?

My home was IIB but I am still making payments (out of good faith). So in hindsight I could walk away and not ruin my credit report. However I do have proof paying the mortgage on time the last 18 months.

A little history - I need to either move or do a refi because my interest rate the last 3.5 years is 9.25%. Obviously now that my Debt to Income ratio is much better and I have solid mortgage payments, one would think I could find something better than 9.25%!

So the question is: When can I begin looking and is it illegal to just walk away from what I have?

[monkatom]

If you walk away then the home will be foreclosed on and you must wait 3 years after the home is sold for FHA.

I had a chp 7 discharged may 2008 continued paying until January 09. Walked away home was foreclosed on and sold September 09 now I need to wait until September 2012 before I can get FHA, longer for conventional and not sure about USDA.

Not sure if you can do a loan mod or if a loan mod reaffirms the debt? Maybe others can chime in on that.

[gophermn]

Here is the thing. I was discharged April 2008 which means April 2010 I should be able to get a FHA, right? If that is the case - then what about this scenario. Today I continue paying as agreed. Find a new home April 2010 and go through the loan process. Pending I get approved (big if) for the new loan and new house, I walk away from the old mortgage which, again, nothing should happen to the credit reporting because it was IIB.

Thoughts?

[destitute]

I think you're going to run into problems with that scenario. They will know that you currently own a house and your income will have to support both payments for them to approve the new loan unless you sell your existing home as part of the transaction.

[gophermn]

Good to know - thanks all!!!

[Ugh07]

I know it sounds like it would work, but the lenders will know that you are letting your current house go into foreclosure so they will not make the new loan.

[gophermn]

Unless you are unfortunate enough to find crooked scam - scum of the earth lenders that I have met then I wouldn't doubt one second they would overlook that.

You want examples? Sure.
I was closing on a rental and this lender literally forged and signed some papers for my buyer lying about his income and length of stay. Gets better!! This same lender hired an appraiser to appraise my house nly to find out this appraiser was fired from his appraisal job but kept using the company's letter heads and paperwork. So now, my house is over-inflated and upside down.
When I try to call the appraiser, I get nothing. When I called the alleged company he worked for, they said he was let go at the time he did my house.

So yes, some lenders would toss their 1st born if they could get a loan.
Pissed in MN!

[hereforinfo]

Unless you are unfortunate enough to find crooked scam - scum of the earth lenders that I have met then I wouldn't doubt one second they would overlook that.

You want examples? Sure.
I was closing on a rental and this lender literally forged and signed some papers for my buyer lying about his income and length of stay. Gets better!! This same lender hired an appraiser to appraise my house nly to find out this appraiser was fired from his appraisal job but kept using the company's letter heads and paperwork. So now, my house is over-inflated and upside down.
When I try to call the appraiser, I get nothing. When I called the alleged company he worked for, they said he was let go at the time he did my house.

So yes, some lenders would toss their 1st born if they could get a loan.
Pissed in MN!

With the tightened lending guidelines, that type of thing isn't so easy for mortgage brokers to pull off anymore. Besides, are you going to lie about having a renter? Even if you were to find a shady mortgage broker, you would be committing mortgage fraud by stating on the application that you receive rental income.

The appraisal process is a lot more difficult, and if the home you currently own doesn't have at least 20% equity and a renter, you will not qualify for another mortgage unless your income supports both loans. A general estimate of the home's value can be pulled up in 2 seconds via their in-house property value program.

They will take one look at the "IIB" on your current mortgage and it will be obvious that you intend to "buy and bail."

To qualify for an FHA mortgage, it has to be 3 years after the foreclosure (clock starts when the title changes back to the bank). Even if it doesn't show on your credit report, the foreclosure still occurs and will be public record. The application asks if you have had a foreclosure and you have to disclose it.

[jwsmartin]

Sounds like at two years, as long as you can sell your house, you will be fine. Can't walk away unless your ratios allow for you to own both homes. That seems very doubtful.

So I would put that house up now, move into an apartment for 6 months, then buy at your two year mark.

Good luck and keep us posted!

[newimges]

We got a mortgage through our local credit union with a great interest rate 16 months after our chapter 7 discharge even with our previous home included in the bankruptcy and foreclosed on. There are always exceptions to the rules.

We went to 2 different banks and they both told us we would have to wait at least 3 years and I was relunctant to go to the credit union but the branch manager took the time to look into our situation and with no debt and a considerable down payment - they approved the loan last May and we have been happily in our new home ever since.

Good Luck!

[RK05]

We got a mortgage through our local credit union with a great interest rate 16 months after our chapter 7 discharge even with our previous home included in the bankruptcy and foreclosed on. There are always exceptions to the rules.

If you don't mind could you give us some figures for the interest rate and did you put down 20%?

My wife was discharged a year ago this month. We are wanting to buy another house after the first of the year. I was told that if she is able to be put onto the loan that our rate would be higher but I don't know how high. My credit score is in the low 800's but we need her income for the house we want. If not then her mother would be cosigning with me.

[Meatstick]

What happens if you filed Ch7, didn't reaffirm your home loan because you are upside down but continue to make all required payments on time ? Would the bank have legal recourse to allow you to continue to make the payments and eventually build up equity and then initiate forclosure proceedings and succeed even if you have made all payments on time and the loan is current at time of forclosure ???


Regards;

Meatstick

[newimges]

If you don't mind could you give us some figures for the interest rate and did you put down 20%?

Our interest rate is 4.75% on a 15 year loan. We put down 30%.