Discharged!

[sophieanne]

justbroke - thanks. I'm just in awe. I have made so many calls (as I said to both FHA and Fannie Mae) and have been told 2 years after discharge.I have made a number of calls this morning to advertisers who say it can be one right after discharge - no luck! If there's a way to do do it (even after having to wait a year), gosh, i want to know about it.

[justbroke]

Me too sophieanne ... me too.

[LadyInTheRed]

sophieanne I believe that LadyInTheRed applied for a refinance. The FHA criteria for refinancing is much different from the criteria for purchase money.

Yes, I was applying for a refi. I didn't realize the criteria were different.

[special111]

Does this mean after bankruptcy there is no hope to get a conventional loan?

[justbroke]

Does this mean after bankruptcy there is no hope to get a conventional loan?

No.

If you look at Fannie Mae's requirements, it's 2 years from a discharged Chapter 13 and 4 years from a "dismissed" Chapter 13. There is life after bankruptcy. It's the "seasoning" of the derogatory credit event, such as bankruptcy, which makes you wait. I'm sure some lenders have more seasoning required, but you should be able to get conventional financing after a successful Chapter 13 that came with a standard discharge in just 2 years.

(Fannie also allows "extenuating circumstances" where you may not meet the guideline but meet the minimums. I don't know what exactly would qualify as "extenuating".)

[LadyInTheRed]

Does this mean after bankruptcy there is no hope to get a conventional loan?

That seems to be the case as long as the BK is on your credit report (10 years after filing a Chap 7 and 7 years after filing a Chap 13). I have a pretty good credit rating, lots of equity and a low debt to income ratio and could not find a conventional loan for a refinance.

[LadyInTheRed]

LOL. JB and I were typing at the same time. I didn't even think to try Fannie Mae and didn't think they were considered conventional loans. I'll have to try them.

ETA: oh I guess that won't work for me. I am not 2 years post discharge and do not have special circumstances. If you are in a 5 year Chap 13, then two years post discharge is the same as the date the BK falls off your credit reports.

[justbroke]

LOL. JB and I were typing at the same time. I didn't even think to try Fannie Mae and didn't think they were considered conventional loans. I'll have to try them.

They have limits of about $424K for conventional from Fannie Mae. But I think you're in California, so you may get access to more money if you're in the higher limit areas.

https://www.fanniemae.com/singlefamily/loan-limits

I'm actually looking into this myself. I need to downsize.

Bankruptcy (Chapter 13)

A distinction is made between Chapter 13 bankruptcies that were discharged and those that were dismissed. The waiting period required for Chapter 13 bankruptcy actions is measured as follows:

• two years from the discharge date, or
• four years from the dismissal date.

The shorter waiting period based on the discharge date recognizes that borrowers have already met a portion of the waiting period within the time needed for the successful completion of a Chapter 13 plan and subsequent discharge. A borrower who was unable to complete the Chapter 13 plan and received a dismissal will be held to a four-year waiting period.

Exceptions for Extenuating Circumstances

A two-year waiting period is permitted after a Chapter 13 dismissal, if extenuating circumstances can be documented. There are no exceptions permitted to the two-year waiting period after a Chapter 13 discharge.