Need better direction on purchase

[BRAUNSTEN82]

Here is the scenerio

ch7 discharge 7/08
No mortgage ever
no car loan during bankruptcy
had to file fue to failing business and leasing company going to sue me for
250k for remaining lease.

Have a 650 beacon And built a great history since. Need to buy in the next few months. I would consider the gailing business a acceptable reason for having to file bk.

So i have read several here say they have got financing and several more say that it can be done. An a bunch say 2 yrs no bnottom line. If it can be done then by who, please tell me where to start looking. I have called a couple local brokers and they all say 2 yrs.

[HHM]

First, realize that the BEACON score is merely Equifax's internal version of the FICO score. Beacon ranges from 300-850. With 650, even without the BK, you probably couldn't get financed in this tight lending environment unless you had 20% down (and even then...)

Anything is "possible". However, step back for a second, a failed business is not exactly a mitigating circumstance. From the banks perspective, that just indicates more poor financial decision making on your part (whether true or not). Mitigating circumstances tend to be medical or disability related.

The other problem you have is that FHA guidelines REALLY ARE 2 years bankruptcy, that is the only game in town, EVERYONE else has longer waiting periods. The push back you are getting is that the mortgage brokers are not willing to put in the time and effort on a long shot (they only get paid if the loan funds).

This comes from the FHA FAQ

A Chapter 7 bankruptcy (liquidation) does not disqualify a borrower from obtaining an FHA mortgage if at least two years have elapsed since the date of the discharge of the bankruptcy. Additionally, the borrower must have re-established good credit or chosen not to incur new credit obligations. The borrower also must have demonstrated a documented ability to responsibly manage his or her financial affairs. An elapsed period of less than two years, but not less than 12 months, may be acceptable if the borrower can show that the bankruptcy was caused by extenuating circumstances beyond his or her control and has since exhibited a documented ability to manage his or her financial affairs in a responsible manner.

Additionally, the lender must document that the borrower's current situation indicates that the events that led to the bankruptcy are not likely to recur. A Chapter 13 bankruptcy does not disqualify a borrower from obtaining an FHA mortgage provided the lender documents that one year of the payout period under the bankruptcy has elapsed and the borrower's payment performance has been satisfactory (i.e., all required payments made on time). In addition, the borrower must receive permission from the court to enter into the mortgage transaction.

Handbook 4155.1: 4.C.2.g-h

By all accounts that I can find, the "extenuating circumstances" must be fairly extreme, death or severe disability of the primary wage earner, etc.

[oldhack]

Unfortunately, a lot of the folks who claim to get/be getting loans prior to two years post-Chapter 7 often quit posting before we learn the outcome of their efforts, or wind up being pushed past 2 years before actually closing a deal. Frankly, I'd be glad to see any large numbers of folks able to get back on with regular life -- including home-ownership -- as soon as possible, but it seems to take more than optimism and hope for it to happen. The only case I recall recently was someone whose BK was caused by his primary job ending due to catastrophic illness. That's the type of thing meant by "extenuating circumstances".
FHA guidelines, which are more generous than any conventional, are here:

http://www.fha.com/credit_issues.cfm

The best option to gain an exceptions appears to be a local (non-national) bank or credit union which retains its own mortgage portfolio -- e.g., it services the loans itself instead of selling them to the likes of CountryWide/Bank of America -- and where you already have accounts.