can i get a home after foreclosure and chapter 7 bk?

[athomas1469]

hello to all who read this post.
i'm coming on the 3 yr mark since my home was foreclosed on. april 2011. it was actually transferred out of my name may 2008.
my chapter 7 bk followed shortly thereafter and was discharged august 2009. so my 2yr wait will be official in august 2011.
many will say i'm crazy but i really would like to become a homeowner again. i've been renting since october 2007 and all my experiences have been awful.
i have rented 2 homes from private owners who take your rent money every month but refuse to make any repairs or upgrades to their properties.
and now i'm renting from a gated apartment community which is supposed to be one of the nicest in my area, but my car was stolen less than 30 days after i moved into it!
i know this will not be an easy task but i think i'm ready for the journey. i invite anyone to come along with me.

[HHM]

Strictly speaking, the answer is yes. Your only options will be FHA or VA (if you have VA eligibility). However FHA's are becoming a little more expensive because Mortgage Insurance Rates are rising. You will need a minimum of 3.5% down, but the more the better. Also, new rules either just came out or are going to come out about the ability of the seller to pay certain expenses.

But, if your credit has recovered, and you have a down payment, it really shouldn't be too much of a problem. The challenge will be finding a mortgage broker willing to work with you.

[athomas1469]

here's where i am today:
income 42000/yr
debt 172/mth
2 cc/open:never late:
1 personal loan used to purchase vehicle:doesn't report on credit rpts but is taken from checking acct montly
current equifax fico 676:transunion fako score 721:experian fako score 658
after reading other popular credit sites i found out that notations on your credit report that say consumer disagrees or
disputes account info is not good with underwriting, so i began to try to get them cleared away now. they have been on
my reports for almost 2 yrs. experian removed them immediately but trasunion and equifax opened investigations so i
have to wait on their decisions. i also have heard about having to write letters of explanations for negative credit items
so since i have several, i will begin writing those to have if/when anyone asks for them

i want to go fha as a first time homebuyer to take advantage of some downpayment assistance programs available in my
area. you have to go to homebuyer classes and only come up with 1% of the purchase price. you will get a certificate
qualify for up to 8000.00 for downpayment/closing costs.

[HHM]

Okay, even though the stated guidelines are that your payment should be no more than 31% of you gross monthly income. In reality, it really should be 20%. Which would mean a Principal and Interest payment of $700 per month. So assuming a 5% interest rate, you are looking, at most, for a $130,000 home, but probably more like $100-110K or less.

But you need to get your credit scores up a little. And you are correct, no one will touch you with pending disputes on your CC report.

[athomas1469]

which is exactly where i want to be! i really didn't want to go over 100,000 since i've seen some great houses in the area i'm looking in that price range. now i'm working on tweeking my credit scores/reports so i won't have any unexpected surprises and just letting time pass until i can officially apply. as u stated a big hurdle will be to find a good broker so i've been trying to do some preliminary work for possible brokers. thanks hhm for taking the time to respond to my post!

[Sweetpea3829]

HHM is a little off...

You CAN also qualify for a USDA Rural Development loan if you qualify income-wise and if the area you are looking to purchase in qualifies. You won't need any money down and you technically don't even need to wait the three years (though it'll be easier if you do).

[athomas1469]

hi, sweetpea.
my income does qualify for usda but unfortunately i don't think the metro atlanta area qualifies for usda. the last home i owned was outside of the metro area and i don't foresee having an 1hr+ commute to work anymore. been there done that-was not good.
i will go back and check again though. thanks for the info

[Flamingo]

What you need to do is find a broker who works with those who have filed BK. The attorney who handled your Chapter 7 Bk is a good place to start because they go through this all the time and they usually have references available. I agree with HHM - probably FHA is is the only one who will consider you; if you do get approved, you are going to be hit hard with PMI upfront at settlement and PMI in your payments on the loan until you have equity in the house of about 22% of the amount of your mortgage and have to pay the PMI in any event for at least five years. The PMI can increase your mortgage payment substantially. The broker can inform you about all that or you can read up on what is involved online as to FHA mortgages. We went through it all when we refinanced during our Chapter 13. Believe me, after going through all we did as to our bankruptcy, saving our house, etc., we will never put ourselves in the position to file BK again because even the years following the BK are expensive as it takes several years to get the BK, etc. off your credit and prove you are creditworthy again. Best of luck to you...

[HHM]

HHM is a little off...

You CAN also qualify for a USDA Rural Development loan if you qualify income-wise and if the area you are looking to purchase in qualifies. You won't need any money down and you technically don't even need to wait the three years (though it'll be easier if you do).

That is true, but I usually leave that one off the list because of its limited availability.

[Sweetpea3829]

Yeah...it does tend to have limited availability. But I was actually surprised to find areas of eligibility where I didn't think it would even come remotely close to being considered "rural." I figured the majority of our home state of RI would not qualify, save perhaps for the more southern parts of RI that are still a bit farm-like. But a good part of of RI actually qualified. We could have actually afforded a home in RI under USDA at the 1% subsidized rate. Of course...we didn't learn about the program until we were already determined to leave RI and head to NY and honestly, I think we probably would have still left...the cost of living here is still less, even given the higher property taxes in NY.

It's a good program...it's not used nearly enough. And surprisingly...here in rural western NY where pretty much every property qualifies...it STILL isn't used that often!

[nc73]

Yeah we know you mean well but seriously, nothing around any place that's remotely populated by living beings. But if you are in bumyouknowwhat, do have a look at USDA.

[dspii]

USDA rural area's vary by state and county.........not always in eastbumyouknowwhat.........sometimes rather close to burbs....and offer a nice place to raise your kids. Go to their website and enter your state and county, you might be suprised.

[Sweetpea3829]

USDA rural area's vary by state and county.........not always in eastbumyouknowwhat.........sometimes rather close to burbs....and offer a nice place to raise your kids. Go to their website and enter your state and county, you might be suprised.

That's what I'm saying! We're from Cumberand, RI (we don't live there any longer) and never ever thought it anywhere near there would qualify for USDA. But a good chunk of northern Cumberland did indeed qualify. There were other parts of the state that qualified as well. The parts of RI that qualify for USDA funding are merely minutes from suburbs and not far at all from major cities like Boston and Providence.

You'd be surprised...

[athomas1469]

quick update:

received results from equifax disputes:
1. iib hsbc car loan/repo-tradeline deleted
2. iib hsbc chargeoff-consumer disputes acct info remark deleted
3. iib first resolution collection-consumer disputes acct info remark remains

equifax score bumped up to 691
<30% on utilization:working to get <9% on 1 cc
still waiting for transunion results
still trying to write lettrs of expl for all neg accts-challenging

i appreciate everyone's advice.thanks
any ideas on how i should handle first resolution? they may or may not deal with me since i iib their collection acct

[athomas1469]

quick update:

received results from transunion disputes:
same exact results as equifax! seems weird 2 me

my equifax score is still inching upward as utilization gets lower; currently 697
transunion fako score is currently 729

i've decided to leave the collection acct remarks alone per some new info i read:
fha supposedly has new guidelines regarding dispute remarks on accts
1. if the acct has a zero balance
2. if the acct is marked as paid in full or acct settled
3. if the disputed acct is less than 500.00 and more than 24 months old
then the acct in dispute remark does not have to be removed!!!

anyone else heard about this???