Ch-7 Discharge Jan 2012, Looking for Mortgage

[Ozzi]

Hello all - I had to go overseas last year so upon my arrival back to the USA I decided to file Ch.7 to avoid anyone garnishing my wages. Anycase I received my discharge on Jan 2012. I am back on my old job, good pay, up to 50% down payment. Can I get a mortgage for the remainder amount? How soon can I get it? Any recommendations for which lender to use. Thank you all for your assistance.

[AngelinaCat]

Welcome to the forum!

Now for the sad news: from what I have read here, and others will chime in I am sure, but you will have to wait for two years past your discharge, and possibly your closing date, before your credit scores will be high enough that someone will give you a decent rate.

[drowning123]

I checked with a few banks by phone, and they told me exactly what AngelinaCat stated. Hold your horses 'til 2014. Who knows, maybe you can have some sort of luck if you try hard enough.

[Ozzi]

I have heard that a Traditional loan after BK takes 2 years, but with a large down payment such as 30% to 50% can get you a loan one day after bankruptcy. But the caveat is that I haven't found a bank that will do that just yet, but I started looking yesterday. I will report back if I find a bank, so other can benifit as well.

[justbroke]

The super-majority of banks will not underwrite ANY MORTGAGE if you are within 2 years of bankruptcy unless the loan is being underwritten by a different entity (such as FHA, FDA, Fannie, Freddie). Even in those special cases, you need a really good reason and must show that you were current and paid on time prior to the "special event" occurring. Loss of income due to job loss is typically not enough. Serious medical issues, on the other hand, could be a reason.

In any case, I don't know why you're looking to jump back in already. Why not continue to save some more. If you can save 50% in one year, why not just go 100% in two years?

Traditional "conforming" loans actually take longer than 2 years post-bankruptcy.

[LSUTiger32]

Nothing for one year.

One year possible under FHA guidelines if a death in the immediate family of a wage earner caused the BK.

Two years under FHA, good luck. (I am at 2 1/2 years with about a 7% DTI ratio and I am still getting the run around.

Three years under FHA if you filed BK and had a foreclosure. Note: Three years from foreclosure out of your name date.

Four years plus before a convential lender gives you the time of day.

[tobee43]

i'm hard press to believe even many of those with excellent credit are being turned down for mortgages from most all banks presently. of course, there are exceptions to those rules. (my niece rec'd a nice mortgage on a 800k plus house with 50% down and both she and her husband make more than 300k...must be nice, but i'm PROUD of her!!) now, on the other spectrum, i have known of at least 4 people never filed bk, making excellent money, not 300k but debt to income ratio perfect, credit scores in their 800's and all turned down by every bank.

banks simply are not lending much. let's hope something opens up soon, one would certainly think it would with all the inventory held by the banks. but, it's a hard call as when to see when the banks begin to loosen up. i think for now, they are hold tight!

[HHM]

You can try USDA, but again, super long shot.

Minimum time for 99% of filers is going to be 2 years.

[SweetGeorgia]

Welcome, fellow Georgian! Congratulations on your Chapter 7 discharge!

Part of our problem (post-BK would be borrowers) is that there really isn't any private money in the mortgage business at the moment. It's almost all FHA-conforming loans, which go according to the above guidelines - but the banks which actually issue those loans can be even more strict if they want. The worst stories I've heard recently are of people who WERE approved for mortgages - just to have the whole deal yanked out from under them at the last minute. I think I'd much rather get denied up front!

I think we just have to wait it out - not just our own post-BK period, but also this phase in the mortgage market. In the old days it was possible to get a mortgage the day after discharge sometimes! I don't necessarily think that was a great idea, and I don't think we're going back to that, but I do hope the money flow will ease up somewhat.

Maybe consider renting a place that you would be happy buying sometime in the future. With your income and cash, it shouldn't be too hard to get the kind of place you want, and a long-term history at one place will only help your credit.

[Bell30656]

There is always the route I took... Owner finance. In this day and age more owners are willing to finance.

Welcome fellow Georgian.

[Resigned2BK]

I'd just wait until it's 100% too if it only took 1 year to get to 50%. Why would you want to give any of these worthless scum banks any income through interest and whatever? I just wish we made enough money to make 100% possible in just 2 years past when we will eventually get case closed.

[dustinc]

Nothing for one year.

One year possible under FHA guidelines if a death in the immediate family of a wage earner caused the BK.

Two years under FHA, good luck. (I am at 2 1/2 years with about a 7% DTI ratio and I am still getting the run around.

Three years under FHA if you filed BK and had a foreclosure. Note: Three years from foreclosure out of your name date.

Four years plus before a convential lender gives you the time of day.

I'm curious as to what kind of run around you are getting. I will soon be applying and assumed I wouldn't have any issues since it's been two years and credit score is good.

[LSUTiger32]

I'm curious as to what kind of run around you are getting. I will soon be applying and assumed I wouldn't have any issues since it's been two years and credit score is good.

Absolute scrutiny of every single thing. They questioned me up one side and down the other because I made some deposits other than my checks from work via direct deposit. They wanted to know what I was doing to earn the money. Many other examples like this.....the thing they seem to have cared about the least was the credit report. Now I am on hold because an old second mortgage that was supposed to be cancelled when I paid off my previous residence after Katrina was never removed. Now they are telling me that I may have to wait three years (so until this November) because of said problem unless I can get it resolved. They want to treat it like a foreclosure......freaking insanity. These banks are nit picking every single thing right now and with FHA you can double that nit picking.

[dustinc]

Absolute scrutiny of every single thing. They questioned me up one side and down the other because I made some deposits other than my checks from work via direct deposit. They wanted to know what I was doing to earn the money. Many other examples like this.....the thing they seem to have cared about the least was the credit report. Now I am on hold because an old second mortgage that was supposed to be cancelled when I paid off my previous residence after Katrina was never removed. Now they are telling me that I may have to wait three years (so until this November) because of said problem unless I can get it resolved. They want to treat it like a foreclosure......freaking insanity. These banks are nit picking every single thing right now and with FHA you can double that nit picking.

Interesting. So were you trying to include those additional deposits as income?

[LSUTiger32]

Interesting. So were you trying to include those additional deposits as income?

No, it was just random things......like gifts for my kids (I buy them what they want and deposit the checks)......nothing really that big and nothing that I was trying to claim as income. They have two months worth of my pay stubs for both me and my wife so they know exactly what we make and when we make it.