One important topic that needs to be mentioned early on in the new year, is the Mortgage Part Of Bankruptcy. The fact of the matter is just because you may have fallen on some hard times, a lot of people share that same pain with you. On the average year, 1 out of every 50-60 households claims bankruptcy so that means at least 1 household on the street you live on will claim bankruptcy every year. This calculates out to 1.5% – 2.0% of households in the United States will claim bankruptcy every year. Now your financial credibility isn’t over and you can work on re-establishing your credit in this article we will see just what you have to do to own a home again. Now there are definite differences when dealing with 2022 Guidelines On Mortgage Part Of Bankruptcy for Conventional Loans and FHA Loans.
When you are talking about Conventional Loans and 2022 Guidelines On Mortgage Part Of Bankruptcy Fannie Mae and Freddie Mac come to mind for the fact that they are the 2 Government Sponsored Enterprises or GSE’s who create the guidelines that are used for creating guidelines for Conventional Loans. If you had a mortgage as part of your Chapter 7 Bankruptcy then the waiting period for you to qualify for another Conventional Loan is 4 years from the discharge date of the bankruptcy.
If you want to obtain an FHA Loan, the 2022 Guidelines On Mortgage Part Of Bankruptcy are as follows. The mandatory waiting period for an FHA Loan after a Chapter 7 Bankruptcy is 3 years after the sheriff’s sale of your home and NOT the discharge date of the bankruptcy. If you included your FHA Loan in your Bankruptcy filing, then you need to make sure you do what you can to move along the transfer of the home out of your name or the waiting period cannot start and you will be left in limbo for a considerable amount of time.
If you were a previous home buyer and went through some hard times you do not need to worry because lenders these days know this and have developed guidelines to help put borrowers back in homes again after they have re-established their credit. Lenders realized it would do more harm than good by cutting off all the borrowers with a bankruptcy in their history. Now let me tell you, all lenders are not the same and some have what we call Lender Overlays which are additional guidelines in place in addition to the guidelines set forth by Fannie Mae, Freddie Mac, and the FHA. For example, the waiting period on a Conventional Loan could be 4 years per the guidelines, but a lender can enforce a waiting period of 7 years in an effort to reduce the risk of loans they approve and fund. Now if you want to work with a group that does not deal with lender Overlays then Loan Consultants is the place you need to be. We can help you get loans that use minimal guidelines. Get in touch with us ASAP to get started at 888-900-1020 or firstname.lastname@example.org.
With a new year comes new guidelines and hopefully I can help you in understanding the difference in guidelines for mortgage part of bankruptcy between Conventional Loans (Fannie Mae and Freddie Mac) and FHA Loans (HUD). Let’s start with Fannie Mae and Freddie Mac shall we? These two have much looser mortgage lending guidelines when it comes to the actual recorded date of the the foreclosure when it is a mortgage as part of bankruptcy and qualifying for a new conventional mortgage after the mandatory waiting period. Do not worry if you do have a bankruptcy and/or foreclosure on your history as all mortgage programs have mandatory waiting periods after bankruptcy and foreclosure, and you WILL be able to purchase a home again. However, there are different guidelines and we will go over these changes in the paragraphs below.
Fannie Mae and Freddie Mac are the two government-sponsored enterprises (GSE) that govern and set standards for conforming mortgage loans otherwise known as conventional loans. The newly released 2016 guidelines on Mortgage Part of Bankruptcy are as follows: If you had a mortgage and/or mortgages as part of your Chapter 7 Bankruptcy (also know as debt liquidation where liens are released), the waiting period to qualify for a conventional loan is four years from the discharge date of your Chapter 7 Bankruptcy. As long as the mortgage was part of the Chapter 7 Bankruptcy, the four year waiting period begins from the discharge date of the Chapter 7 Bankruptcy. With regards to conventional loans, the foreclosure can be recorded at a later date and it does not affect the wait time.
With regards to FHA, if you have had a mortgage as part of your Chapter 7 Bankruptcy, the mandatory waiting period to qualify for an FHA loan is three years from the recorded date of the FORECLOSURE. Even though this mortgage may have been part of your Chapter 7 Bankruptcy, the discharge date of the bankruptcy means nothing as it all resides on the date of the foreclosure. This could pose a problem because a foreclosure may happen over a year after the bankruptcy has been discharged. The other way to speed up this process is to be diligent after the bankruptcy discharge date to make sure that the mortgage lender gets their name out of the deed of the home as soon as possible.
Just because you have gone through some tough times and have a bankruptcy and/or foreclosure on your history it is still possible as a home buyer to now qualify. These days, mortgage lenders understand that borrowers can go through some difficult periods in their lives resulting in bad credit from unemployment, business loss, divorce, or even medical issues. Speaking first hand, bankruptcies and foreclosures can happen to the best of us due to some extenuating circumstances. Even though it is possible to obtain a mortgage after bankruptcy and foreclosure, lenders are going to want to see you have been re-establishing your credit and have been timely with your payments in recent history.