June 4, 2012
A reader asks, “I filed for my Chapter 7 bankruptcy in 8/09 & was discharged in 2/10 since to discharge…have worked on getting my scores higher which I have about a 650 now but my only concern is my previous house has yet to go into foreclosure so I guess what I
February 15, 2012
A reader asks, “Bankruptcy filed just 2 years ago, is there a way around that? Have a descent (sic) income, employment and debt to income ratio.” There are two types of bankruptcy borrowers sometimes ask about in these cases. One is Chapter 7, where the borrower has debts discharged. The other is Chapter 13, where borrowers have a restructured payment plan enforced by court order. For Chapter 7, FHA loan rules require a minimum two year waiting period from the discharge of the bankruptcy before a borrower may apply for a new FHA mortgage. There is no workaround for this two-year minimum, even when the borrower has tried to reestablish good credit and employment in the wake of the bankruptcy. However, for those who have filed Chapter 13 bankruptcy, FHA | more...
January 26, 2012
A tricky FHA loan question came in recently asking about FHA refinancing, bankruptcy, and more. The reader asks; “I have a situation where i have filed BK chapter 7 and had my house foreclosed, at the same time i had a money lender purchase a house for me and put it in my name and I make payments to him, I have been making payments for 21 months all on time and with taxes and insurance. I would like to refinance through a regular lender and pay off the original loan…So how do I refinance this loan and when am I eligible to qualify? It has been over two years from filing chapter 7 and it will be two years from the foreclosure in Oct 2012. Any thoughts?” There are | more...
May 10, 2011
In our last blog post we explored the FHA rules governing Chapter 7 bankruptcy and FHA mortgage loan applications. Having a Chapter 7 bankruptcy on your credit record does not automatically disqualify you from an FHA mortgage, but what about those who have Chapter 13 bankruptcy proceedings on their credit history? There are many similarities in the FHA rules for Chapter 13 bankruptcy and Chapter 7. The first is that having a Chapter 13 does not automatically mean a borrower will be rejected for the new FHA mortgage loan. Like Chapter 7 rules, the FHA requirements for Chapter 13, a record of on-time payments and improved credit habits is required. But unlike the FHA rules for Chapter 7, borrowers who filed Chapter 13 bankruptcy in the past have additional rules | more...
May 10, 2011
A common question for some FHA loan applicants has to do with previous bankruptcy filings and how having a bankruptcy on a credit record can affect a new application for an FHA home loan. There are two types of bankruptcy-Chapter 7 is a liquidation type bankruptcy, Chapter 13 is a reorganization process where outstanding debts are paid off over a period of up to five years. Chapter 7, where the borrower’s assets are liquidated in order to help pay off the debts owed, does not automatically mean an FHA loan applicant will be denied a mortgage loan. According to the FHA official site, “A Chapter 7 bankruptcy (liquidation) does not disqualify a borrower from obtaining an FHA mortgage if at least two years have elapsed since the date of the | more...