Both mortgages discharged after Ch. 7, now qualify for FHA loan.

[chrisdfw]

I had my old mortgage IIB, did not reaffirm, and "rode through"

after 3 years passed, bought a new home on FHA and had zero issues. I sold the old house since I had equity, but I qualified for both mortgages and they did include the ride through in my DTI (which made almost zero difference considering the new home was vastly more than the old)

I am not sure what would have happened had my DTI not worked out with both

[jpracer37]

Was wondering if certain underwriters look at fha guidelines differently. We included both mortgages that were discharged, not reaffirmed, and IIB. If loans were discharged could this technically fall in the realms of a foreclosure? Reason I ask is we were never asked by lender what our intentions were with old mortgages. Once I told her what our situation was, and that they were IIB and not reaffirmed she said she never heard anythinglike that. Our loan has gone thru the underwriter process, and now we have putdown our earnest money and have been locked in at 3.375 on interest.

[tobee43]

I had my old mortgage IIB, did not reaffirm, and "rode through"

after 3 years passed, bought a new home on FHA and had zero issues. I sold the old house since I had equity, but I qualified for both mortgages and they did include the ride through in my DTI (which made almost zero difference considering the new home was vastly more than the old)

I am not sure what would have happened had my DTI not worked out with both

was this recent??? just wondering, since here in florida and other areas it's just about impossible for anyone to get a loan, no less anyone with a bk?

[tobee43]

no foreclosure is just that. it's a different process and shows up differently than IIB.

you are certain you have this loan right?

only reason why i'm asking is this. i know someone with perfect credit got pre approved went to shop for a house, remember no bk nothing. found the house. told no problem, the mortgage is good to go. (now they own another property in another state that is NOT in bk or forclosed but is under a land contract, so you can safely say it's up to date in all payments). gets the loan, has the closing date, gets the movers, packs the house. 6 hours before the closing the lender calls and said we changed our minds. true story, it happened last year. these people had no bad anything. so that's why i'm saying if you have this loan in the bag, grab it now and don't worry about the later, it will all come out in the wash somewhere.

fha guidelines are what they are, but a lender can either bend with them or not.

[jpracer37]

All i can say is we filled out all the necessary paperwork, included our finances and bankruptcy, and had to tell the underwriter about BK7 and any new accts that we opened. Even told them about how old mortgages were. So last week the mortgage officer at the local bank called and said that everything was good to go and that we could start looking and put up a contract on one. We've been looking since April and we actually had to do paperwork twice because of a payroll issue with my work. All that consisted of was a letter head from the company stating whatever the underwriter needed. And thru all this nothing said about our current, IIB mortgages. So we have put down earnest money and paid for the appraisal on new house and just signed paperwork to lock us in on the interest rate. I'm sure underwriter knows how everything works, but the way our luck is we get this close and lose it even after were told we have the green light. Also, when we filed for BK7 4 yrs ago, our house was no where near going into a foreclosure but had to list it anyways. We signed the letter of intent but both BOA and Citi never sent the reaffirmation paperwork, and so both were discharged. Could this possibly be why underwriter never asked what our intentions were with current mortgages? They had 60 days to mail it, could this possibly fall back to them in any way?

[jpracer37]

just trying to get a clear answer if any

BK7 discharged almost 4yrs. now, both mortgages were current going thru the process and discharged and IIB, and neither reaffirmed. Signed letter of intent but mortgage companies never reaffirmed. We are still in the house and current on loans. Does FHA guidelines see a bk7 the same as a foreclosure?

I read on here somewhere that a poster got info from an underwriter saying that FHA sees the discharge in a bk7 as a foreclosure. Just really would like to know. Reason being and maybe it depends on how the underwriter interprets it ,but we filled out loan work for fha loan, listed our finances and why we had a bankruptcy, even mentioned how are current situation is with current house. The bank hasnt asked about what we are going to do with our house if everything goes thru with new.

We got the paperwork back from underwriter giving us the go ahead to start looking and now we have a contract on a house and just locked in our interest rate.

I know some of you on here think im probably really thinking way too much in to this but just trying to get a clearer look on things if possible. Depending on how you read guidelines for fha, they explain a 7, a 13, and a forclosure, but dont really explain how one is tied to another.

Ive read and have been told mortgage company can list as a foreclosure if we stop paying now and how some dont. And how some use bk discharge date as others do not.

[justbroke]

FHA sees bakruptcy and foreclosure differently. Even between the various chapters of bankruptcy (Chapter 7 vs Chapter 13), FHA will treat them differently.

As for a Chapter 7 discharge (WITHOUT FORECLOSURE), FHA will allow loans after 2 years from discharge. As for a Chapter 7 discharge with a surrender (and subsequent foreclosure), it is 3 years from the actual foreclosure date, not the surrender/petition date.

As for general foreclosures -- without bankruptcy -- it is 3 years from the actual foreclosure date. Similar to how a Chapter 7 with a surrender would work.

Chapter 13s are treated differently. You can obtain an FHA mortgage while in an active Chapter 13 with as little as 1 year of good payment history in the Chapter 13 (they will ask the Trustee), Trustee approval, and "qualifying" credit.

In your particular case, you did not reaffirm, but your discharge was more than 2 years ago (satisfies the bankruptcy "wait"), and you do not have a foreclosure (satisfies the foreclosure "wait"). All you need now, is sufficient credit and possibly a downpayment!

[ValleYum]

What are your intentions for the disposition of your current home? From your past postings, I get the impression you just plan to walk away once you move since your BK discharge relieved you of your financial responsibility for your current home.

Does your income support both mortgage amounts (the first and second for your current home *and* the mortgage for the new house)? If it doesn't, I honestly can't imagine how you have been approved.

My concern would be that the underwriters have been so darn wrapped up with making sure the details regarding your BK have been "fulfilled" that they haven't considered what is going to happen to your current upside-down mortgage once you begin making payments on your new mortgage. I would be very afraid that this oversight would suddenly become an issue in the 11th hour and you will lose any earnest money, inspection fees, etc. that you have already spent. I think this may be what you are afraid of, too. Right?

You may get lucky and be one of the few that can buy and fly in today's housing market. I just hope you are prepared in case things get dicey during this process.

If I have made any presumptions regarding your situation, I apologize. I am not trying to sound judgmental or be a downer, I am just trying to be a realist and address the concerns I would have if I found myself in the same situation that you currently are.

I truly wish you good luck. I hope everything works out for you and your family.

[justbroke]

I have to agree with ValleYum. I didn't consider the prior postings regarding "walking away" from the current mortgage. It is certainly a consideration during the final "phase" of underwriting! While they can pre-approve you, they certainly will look at the totality of the deal... including whether the disposition of the current property is required before they'll close the new loan. As someone who has owned 3 properties at once, it is a major consideration for the underwriter.

If the current lender doesn't care about the disposition of the current property, I too think that it would be very fortunate for you.

[jpracer37]

I just hope everything goes well. When we first looked into the loan the loan officer asked what about current mortgages, we told her about our situation in BK and they had not been reaffirmed yet were are still paying on them. When filling out new loan paperwork we listed our finances, any new credit we have taken on since Bk, and included our current mortgage. We had to write about our circumstances of why we filed for Bk, I included that our current mortgage was IIB, discharged, but not reaffirmed, and we are still paying on them. So since the mortgage companies were not reporting our payments, the bank had me do a conference call with both BOA and Citi to see how much loans were for, what our balance is on both, to see if we had been late at all, our monthly payments on both, to see if we were current, and when next payment was due. The underwriter has actually had our paperwork since april, we had to file again because of a payroll issue thru the company i work for. And thru all this and the loan officer at bank, nothing has been brought up about current state of our home and what we are planning on doing. I even mentioned to loan officer that we were thinking short sale or just signing the deed back over to mortgage company. This is what my lawyer had mentioned to me, and still even after being given the go ahead to look and put up a contract nothing has been asked about current mortgage. So what could happen if evryting goes thru, we get the loan and decide to either short sale or sign the deed over AFTER we get into new house?

[Amy26]

Is the house (deed) still in your name? I actually came back here to look for an answer for someone on another forum that is in a similar situation... they are trying to do a USDA loan and they are still living in the house they IIB'd like 7 years ago. They got pretty far into the process but then once the underwriter saw that their house deed was still in their name, this became a huge problem and they probably will not be able to get the loan. They told them that the deed on the house they included in their bankruptcy had to not be in their names or they couldn't qualify. I'm not sure if FHA has the same guideline.... but noone has said anything to you about the ownership of the home you're in now?

[jpracer37]

I would say our names are still on it, not sure if that changes once you go thru a 7 and house is IIB. So far nothing has been said. We had to provide 1yr of taxes, all our finances, any debt we have aquired after BK7, had to write and tell them why we filed for BK7 and stated in that that our mortgage is still current and up to date. The bank ordered a conference call for BoA and Citi to see what our payments are, if we have ever been late, what the balance is, and still nothing said about current residence and what we plan to do with it. I did state our situation to mrtgage officer at bank about our BK7 and that our mortgages were not reaffirmed but were IIB and that we are still paying. She said she never heard of a situation like ours. Told her we were thinking either a shortsale or sgning over the deed.

[Amy26]

I would say our names are still on it, not sure if that changes once you go thru a 7 and house is IIB. So far nothing has been said. We had to provide 1yr of taxes, all our finances, any debt we have aquired after BK7, had to write and tell them why we filed for BK7 and stated in that that our mortgage is still current and up to date. The bank ordered a conference call for BoA and Citi to see what our payments are, if we have ever been late, what the balance is, and still nothing said about current residence and what we plan to do with it. I did state our situation to mrtgage officer at bank about our BK7 and that our mortgages were not reaffirmed but were IIB and that we are still paying. She said she never heard of a situation like ours. Told her we were thinking either a shortsale or sgning over the deed.

Gotchya... yea that was the problem with this USDA loan situation for the people I mentioned. Cause if they did a deed in lieu or a shortsale, then that is technically treated the same way as a foreclosure and would require 3 years post deed transfer to qualify for the loan... I came back here cause I thought I remembered someone on the BKForum that was able to successfully do this while still living in their home that they IIB'd.

So, I'm curious how your situation turns out as well.

[Amy26]

Was wondering if certain underwriters look at fha guidelines differently. We included both mortgages that were discharged, not reaffirmed, and IIB. If loans were discharged could this technically fall in the realms of a foreclosure? Reason I ask is we were never asked by lender what our intentions were with old mortgages. Once I told her what our situation was, and that they were IIB and not reaffirmed she said she never heard anythinglike that. Our loan has gone thru the underwriter process, and now we have putdown our earnest money and have been locked in at 3.375 on interest.

And to answer this question, no, what you did is not considered a foreclosure. A home gets IIB'd in your bankruptcy and that wipes out the loan but not the ownership. The home has to go through a foreclosure process after the bankruptcy to remove the home from your name. IE: I did the same thing... I included a home and then almost a year later, the bank finally foreclosed on it. However, I was not living in it nor paying on it. The foreclosure does not show on the credit report though because it was included in bankruptcy.

Typically, the rules for getting a new FHA or USDA loan is that you need to be 2 years post bankruptcy and 3 years post a foreclosure. So, even if your home was included in BK in 2000 but it doesn't get foreclosed on till 2010, you wouldn't be able to get a new home until 2013.

[jpracer37]

Our bank said a 3 yr wait is what they do. With the paperwork filled out and showing our BK, all our finances, all new debts after BK, explaining our reason for BK, and having to do a conference call with both mortgages to show loan amount, late payments, and to see if we were current. Wouldnt you think the underwriter would have brought up the situation with current home? We listed home loans on paperwork and even told loan officer about signing over deed. When we explained how our BK went and how mortgage wasnt reaffirmed but yet still paying on them she said she hadnt heard of a situation like ours. But when paperwork got to underwriter shouldnt they have to put everything in play? When i read everything on here all ive seen is that im doing a "buy and bail". Hadnt heard of that until getting here. Wouldnt the underwriter have come back pretty quick with a definite NO on the loan instead of letting us know everything was in order and we could start looking? Both loans are listed on bank paperwork, we even took our BK paperwork to bank to put copy in with loan papers. The only issue we've had was a payroll dispute and underwriter needed a letterhead from the company i work for. Thats it, the bank has actually had our paperwork since early april and when the issue came up with check stub we were at he 90 day timeframe and had to refile paperwork and do another conf. call. Just want to add that our current house was not going to be rented or be used as a rental property like most info ive seen on buy and bail. We said that new house would be primary, so wouldnt the underwriter have a problem w/ current home and us putting in for FHA loan and using new house as primary residence?