Waiting time after bk 7 on a Fha loan?

[ironpirate]

Just tried to apply for a VA mortgage with Veterans United and they said I had to wait 3 years after discharge to get approved since I BK 7 on a Fha loan which is government backed. Is this a veterans united lender guidline or are all lenders have to follow this? And if anyone knows of any othe Va lenders?

[justbroke]

The guideline for FHA was generally 2 years from bankruptcy but 3 years from a foreclosure! Did you have a foreclosure as part of the bankruptcy? Just wondering.

In any case, the FHA guidelines are just that... guidelines. The lender can add additional "seasoning" requirements to the base FHA rules. That means if you go to lender ABC Bank and they require 3 years from a bankruptcy, then you need to meet that lender's additional seasoning requirement of 1 year. This means that you will probably need to "shop" for a lender that will do the base FHA "guideline" of 2 years for seasoning after a discharged Chapter 7.

(The VA seasoning guidelines are near identical to FHA's guidelines. The VA also allows the lender to tack on additional seasoning requirements.)

[ironpirate]

I thought it was 2 years also, it was not foreclosed on and I'm still living in and paying on it.

"Normally, we are required to wait 2 years from the discharge date of a Chapter 7 Bk. When the bankruptcy is on a Government backed loan, such as your FHA loan. There is a 3 year requirement."-veterans united

Does anyone know a lender with just 2 year seasoning?

[justbroke]

You should ask for reconsideration or a "special" exception. If you are current and have been paying on time, then you have not foreclosed. Please remember that the actual bank can, and some do, add their own requirements. I'm thinking that maybe your VU loan officer mistakenly thought that you defaulted on the other loan.

Otherwise, you'll have to look for other lenders.

[ironpirate]

Yeah, guess ill call him back and see. Going to talk to NavyFederalCU and see with them since I bank with them also.

[ironpirate]

"The 3 year guideline is followed by any bank doing a Government backed loan .* VA, FHA, USDA etc
*
I am not able to make any waiver on this aspect."-vu

Ill guess Ill find out with Navy fed.

[justbroke]

What they wrote is not correct for a loan which was not foreclosed upon. Of course, the guidelines are enhanced by the lender so they can add additional seasoning requirements. I would certainly ask NFCU (Navy Federal) what their guidelines would be. Make sure you explain that you filed bankruptcy but retained the property and have been paying on time with no late payments.

(I read the FHA guidelines and there is nothing which exactly matches what you provided as the response from the lender. However, the guidelines are just that, and lenders are free to add other seasoning requirements. In fact, it mentions nothing about reaffirming or not reaffirming a mortgage. It only mentions foreclosures and short sales. When there is a bankruptcy, the loan officer is supposed to send it to manual underwriting and the application is scored based on other factors. In the end, if the particular lender doesn't want to do business, they just don't want to do business and are not required to.)

[LadyInTheRed]

ironpirate, have you read the stickies at the top of this forum? You may find some of them helpful.

[ironpirate]

What they wrote is not correct for a loan which was not foreclosed upon. Of course, the guidelines are enhanced by the lender so they can add additional seasoning requirements. I would certainly ask NFCU (Navy Federal) what their guidelines would be. Make sure you explain that you filed bankruptcy but retained the property and have been paying on time with no late payments.

(I read the FHA guidelines and there is nothing which exactly matches what you provided as the response from the lender. However, the guidelines are just that, and lenders are free to add other seasoning requirements. In fact, it mentions nothing about reaffirming or not reaffirming a mortgage. It only mentions foreclosures and short sales. When there is a bankruptcy, the loan officer is supposed to send it to manual underwriting and the application is scored based on other factors. In the end, if the particular lender doesn't want to do business, they just don't want to do business and are not required to.)

Yeah, I couldn't find anything either, i'm thinking its a lender guideline. Kinda frustrating but Oh well atleast i found out me and my wifes credit score. My mid score was 699!

[ironpirate]

They way they are saying is that i dont have ownership on my current property? There trying to treat it like a foreclosure. Now they want me to get a letter from my current mortgage lender saying that i own the property and not defaulted and history of payments. Jumping through hoops, well i applied with navyfed and just sent to underwriting so ill find out monday on that. So the journey continues....

[tobee43]

ironpirate, you will find the guidelines will vary from person to person. recently, on this site someone had a thread which sorry i can't locate at the moment that got a VA loan 2 years out of bk.

even though the guidelines for the FHA are clearly outlined on their site, some days, depending on who's looking at them, the FHA guidelines are 2 after bk and 3 after foreclosure or 3 after bk and count down again after foreclosure. it's enough to drive anyone away! i know quicken loan said it's 2 years after bk...period. i would call them and see what they say now, as it changes person by person and day by day. there have been such a few, not even a handful i have seen or read about on this forum that have been able to purchase within 3-4 years after a bk nowadays. after all, the FHA guidelines say they are suppose to follow the 4 "c's"....and really if you meet the following:


4155.1 1.A.4.a Purpose of a Mortgage Credit Analysis

The purpose of the mortgage credit analysis is to determine:

− a borrower’s credit performance
− a borrower’s capacity to repay the mortgage, and
− whether or not the borrower has sufficient funds to close, and
• limit collection actions or foreclosure

the information you are rec'ing from them as far as treating your property like a foreclosure is closer to the truth, although not technically, or legally processed, it was most likely showing as IIB on your credit report, so they just figure it's a matter of time. i have no clue why or what the difference is for them, a bk is usually considered or at least, was, "worse" than a foreclosure which at one point only stays on one's credit for 7 years while a bk stays for 10 years. also, the fact that maybe 15 years ago a foreclosure may have not appeared often while today's credit reports are full of them, more now than at any other time in history, so it can't be that much of a surprise to many of these underwriters. also, it's best to be right up front with everything...about the bk, staying and paying, if that's what your doing, which, again, may not sit well with them. it's hard to tell since they really can make up any reason they want to deny you.

i would look for a realtor that will work with you, that may have a handle on some lenders that work with situations such as yours, as well as every hud, vet, lenders there is out there. call you local vets office and see whom they can recommend.

best of luck to you, something will come up, it just may take a bit of time.

[LostItAll2]

It sounds as though I will never ever get another mortgage again. Not that I am ready for one yet.

[ironpirate]

I don't think veterans united knows what their doing and how ch 7 bk's work. They think a bk is an auto default foreclosure on a mortgage. And thus the 3 years from discharge on a government loan. They use CAIVRS report to see if you have defualted on a goverment back loan. Guess what mine is clear and they want me to jump through hoops to show i still have ownership on my home and etc. So screw them, on to NavyFed, I'll see how underwriting goes Monday with them. I used to be a loan officer before I joined the Army. So I have an idea how this goes. If navyfed doesn't work, ill use Quicken loan as a last attempt. My credit score is 699, wife 668 and combined monthly income of over $6500, so hopefully can find someone to get financed with.

[justbroke]

I wish you the best. Unfortunately, the lenders can do whatever they please, so it seems. Please let me know how NFCU treats you!

[downsized]

I wish you the best of luck! I'm in a similar situation. Discharged a chapter 7 in Aug 2009. Stayed and paid on the home but the mortgage was not reaffirmed and the payments aren't reported to the credit bureaus. No foreclosure. Haven't missed a single payment to date. In Nov, we started looking into financing for a new mortgage. We have scores in the high 600's, the income to support both the current and new mortgage while we look for a renter, and money in the bank. We met with a broker who got us an automated pre-approval. Just to make sure were weren't going to have issues....because after being around this board for 3.5 years, i KNOW there will be issues....I asked the broker to get a manually underwritten pre-approval. Good thing I did. The automated pre-approvals are only as good as the paper they're printed on. We've had 8 lenders turn us down. The reason? Not having a reaffirmation on the house. I don't think underwriters really know what to do with people in our situation. Most people don't stay and pay. Guidelines on that are pretty clear. Stay and pay and the water gets muddy. So, here I am, 6+ weeks into the lender hunt and it looks like I'm making some headway. Got a lender to review our case, which included the usual items you provide...pay stubs, taxes, etc, and he sent our broker an email saying FHA is a no-go but non-conforming is very possible. He said he got the go-ahead to procede if we can provide 3 years of mortgage payment history. That was faxed to his office today. Hopefully this is my ace in the hole.

It won't be easy. You'll be scrutinized more than the average applicant. You'll have to jump through hoops. You'll get discouraged. You'll probably go through several lenders before you find gold. But it's not impossible. Especially if you have a downpayment and don't have to go VA or FHA. I've seen 2 cases in the last 6 or so months of people in our situation who were financed so I know it can be done if you find the right lender. And, if you do have some money towards a new home, look outside the VA box and that might open some doors for you. If this works out for me, I'll share the name of the mortgage company.