Mortgage lenders for folks like us?

[TerryTurner]

Hi, all. I'm new to the forum. My wife and I filed in March of 2012, and so are about halfway through our 5 year payment period before everything is dismissed. We gave up our two rental properties with the BK, but were able to obtain four new credit cards between us, with a total of about $7,000 in balances, after about a year. We use them very sparingly, and have excellent track records and payment histories with them. My credit score is about 650 right now, and my wife's is about 680.

I would like to know if anyone here would recommend any particular mortgage lenders who work with folks in our situation. Our first mortgage was finally paid off last year, but we have a second, an adjustable rate line of credit, with a $194,000 balance. The minimum payment I'm making now are only about $550 per month because the rate is currently so low, but I realize that's likely to change at any time. I'm interested in locking in a fixed rate before they start going back up with an eye toward paying this off in as few years as possible.

Thanks in advance for any input here.

[Pandora]

So if Im reading this correctly, You have 4 new credit cards while IN your CH 13 plan and are holding a $7K balance on those cards but are only half way thru your plan and you have a 2nd mortgage that is $194K interest only and you're wanting to refi.

Question: did you read your confirmation order about not obtaining new debt while in a Ch 13? Did you ask trustee before you applied for those credit cards?

[TerryTurner]

Thanks for your response. We have four credit cards with ZERO balances on them. They total about $7,000 in available credit. My apologies for the incorrect wording. Also, the remaining mortgage on my residence has a balance (principal) of 194k.

I'd like to refi to obtain a fixed rate as opposed to the fluctuating rate I now have, which is only as low as it is because of the economy. Obviously this rate can go quite high as things change so I want to lock in it at a fixed rate now, possibly for 10 or 15 year term, and pay it off as soon as possible.

My attorney gave me the go ahead to obtain the credit cards in an effort to start rebuilding my credit.

Thanks again for your response.

[Pandora]

Glad you clarified that you weren't holding a $7K balance. Your attorney gave you the go-ahead, however you still should've cleared it with the Trustee - ALWAYS get the Trustee's permission to obtain any credit. Your confirmation order should tell you whether or not you were allowed to take on new debt; most orders do not allow new debts but some make the allowance for up to $5K without Trustee's permission. As with everything, YMMV but its always good to confer with the Trustee. The worst thing in the world is to reach the end of your plan and then finding out you get dismissed due to something you did that you shouldn't have.

As to the refi - many banks will not touch you while in a Ch. 13 and I believe, it's upwards of 2 years after your discharge, but dont quote me on it. Again, its something you'll have to ask your Trustee permission to obtain. Are you in a 100% payback to unsecured creditors?

[LadyInTheRed]

Pandora, I respectfully and lovingly disagree with you that she should have conferred with the Trustee without her attorney telling her to do so. It is her attorney's job to advise her what is and is not allowed, not the trustee's. No debtor represented by an attorney should contact the Trustee directly unless directed to do so by his/her attorney. Even if she did contact the Trustee, the Trustee probably would have told her to call her attorney.

I was also relieve to read that the $7K was available credit, not the balances.

[BNKRPTinNC]

The only way that I know that you may be able to refinance while in an active 13 is under HARP, provided you meet the criteria. Otherwise, as Pandora posted, it's more than likely a 2 year wait post discharge. Only speaking as to the walls I have hit in an attempt to do just that.

[Pandora]

LITR...I understand what you're saying and to a point, I agree with you...you're so loving to me LOL. I didnt mean to imply the OP shouldn't have asked their attorney, of course that's the first thing everyone should do, but knowing what your confirmation order states and obtaining Trustee permission are important. It's so odd how different Trustees offices are; we could call or email ours with any questions we had and they would answer without issue, but I do understand that not all are this way.

As with everything YMMV, of course...just as attorney's vary. Some people have been burned by going to BK mills or attorney's that dont specialize in CH 13 specifically, in which case, I've seen on here they do the same thing and get in trouble by the trustee because their attorney says "yep it's fine" only to later discover it wasn't upon trustee finding out.

[TerryTurner]

Thanks to all for the feedback. It is appreciated. I definitely do need to get my mortgage refied at some point before the rates start heading back up. The good news is that I have paid off my first mortgage and, even though I'm still in my plan, I have already started to repair my credit rating.

I'm looking at securing a fixed (low, while they're still low) rate and begin paying it off without worry of the rate going back up. I'll check with the HARP situation and see what'll work for me.

Thanks again for your input folks!

[mavric]

You can try loan depot. we were doing a HARP refi with then ,all was good till we got to the end. Your mortgage show us 30 days late for the past 4 years and it all blew up.
They will work with people in ch13.

[nsupanda]

I'm in my final year of our 100% payback Ch. 13. We were hoping to get a mortgage right after we are discharged because the house we live in now is literally falling apart (we do not own this house, it is a double-wide owned by my mother). So, from your experience, we should wait 2 or more years after we are discharged to apply for a mortgage?

[BNKRPTinNC]

I'm in my final year of our 100% payback Ch. 13. We were hoping to get a mortgage right after we are discharged because the house we live in now is literally falling apart (we do not own this house, it is a double-wide owned by my mother). So, from your experience, we should wait 2 or more years after we are discharged to apply for a mortgage?

All I can suggest is to inquire. I have been unable to take advantage of the current rates as I have a conventional mortgage loan and unable to use HARP. I have pretty much resigned myself to the 2 year wait and hope that rates will still be better than what I am at. I did get one offer but it required PMI along with closing costs. It wasn't going to save me anything so I passed. Like I said, it won't hurt to ask.

[justbroke]

I would take advantage of current rates AND THE FACT that you can easily get an FHA loan while in an active Chapter 13 by showing only 1 year of on-time payments ot the Trustee (combined with no "new" delinquencies on your credit report or having reestablished credit otherwise). At least, FHA is something to look at while in an active Chapter 13 because of the generous guidelines (but you'll still need a 580-619 score to get 97.5% financing... and may be able to get 100% FHA at 620-640+). Of course, you'll need to find a broker to find the right bank for you... since many banks have their own overlays (requirements) on top of the FHA guidelines.

[bridget]

As someone said earlier, Loan Depot. They are working with me. However, they waited to the last minute to pull my title so we hit a bump with a junior lien. Try them with cautious optimism.

[159515951]

I would take advantage of current rates AND THE FACT that you can easily get an FHA loan while in an active Chapter 13 by showing only 1 year of on-time payments ot the Trustee (combined with no "new" delinquencies on your credit report or having reestablished credit otherwise). At least, FHA is something to look at while in an active Chapter 13 because of the generous guidelines (but you'll still need a 580-619 score to get 97.5% financing... and may be able to get 100% FHA at 620-640+). Of course, you'll need to find a broker to find the right bank for you... since many banks have their own overlays (requirements) on top of the FHA guidelines.

I had to comment on this, as I've become a reluctant expert on this issue. I recently closed on a home using an FHA loan while in an active Chapter 13, and it's anything but easy. It is a huge, multi-month trip to documentation hell. It's worth it, but let's not pretend for one minute that it's easy.

As you said, the banks have their own layered guidelines. That's very key to this discussion.

[TerryTurner]

Due to the great info I've gotten here and elsewhere, I've decided to try Navy Federal mortgage. I already had a couple of accounts with them and heard they're friendly to my situation. I've already started the process so I'll post my results here, either way. Thanks again folks.