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Can I qualify for a new mortgage? In a chapter 13 bankruptcy that ends May 2013 and currently going through a divorce.

During the bankruptcy we did not reaffirm our mortgages. We have been making the monthly payments and have not been late. Credit score is around 649. by solo_1_2013 from Cleveland, Ohio. Jan 2nd 2013 Reply


Currently we have a Wells Fargo and Citi mortgage non FHA, non Fannie or Freddie, the BK began in June or July of 08. The mortgage was no reaffirmed but paid evey month on time since BK was filed. Mortgage has never been modified

Jan 3rd 2013
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Steven Ceceri (CreativeFinancingOptionsGroup)
#36 ranked lender in Massachusetts - 723 contributions

The underwriting guidance for this file would be to process it as a Manual Underwritten File which could have more leniency with FHA Underwriting Guidelines. The 2nd Mortgage would have to be resubordinated as you know and the 1st Mortgage would have a chance to be refinanced, assuming it made sense. The is no guarantee of getting the file approved, so you need to determine if it is worth the effort of applying for a loan and moving forward with documentation gathering, submission of the required financials and signing of all required disclosures. A letter of explanation would be needed and all of your bankruptcy paperwork and payment history on all debts being paid as there is no allowance for any late payments. See if you can go back to 2008 and confirm all of the creditor payments have been made on time and then review your credit report to confirm that there are no negative credit tradelines posted since this process began. Also, there should be a demonstrated benefit of the chapter 13, such as the debts being almost paid off and to show a history of accumulated savings (bank account balances should have increased with the savings from the chapter 13 bankruptcy).

Jan 3rd 2013
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Bert Carpenter (BertCarpenter)
#37 ranked lender in Arizona - 1,828 contributions

Good news/bad news. As long as you are IN a chapter 13, you will be required to obtain approval from your trustee to do a refinance. Once your 13 has been discharged, no trustee approval is required. As for timing, as long as you have been in your 13, one year and have made the last 12 payment on the payment plan AND on the mortgage, if not part of the plan, then you have fulfilled the "Wait Penalty". The second mortgage will have to be willing to subordinate, but even if they did, FHA does not allow for secondary financing, and I don't believe you would be able to get an exception even with manual underwriting. If you were able to get an exception, the combined loan-to-value would still need to be below 96.5%. Finally, the new loan will have Mortgage insurance which will eat up a lot of your interest savings. My advice is to find a Licensed Mortgage Professional in your area to run detailed information past. You can find a one at the National Association of Mortgage Professionals at: http://www.namb.org/assnfe/SearchBroker.asp?SnID=1921118381 ~ Bert Carpenter, The LoansA2z team of NOVA Home Loans ~ NMLS 40586 ~ Licensed in California and Arizona ~ www.LoansA2z.com 888-889-9950

Jan 3rd 2013
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Ken Burrows (mortgagesforamerica)
#20 ranked lender in Nevada - 572 contributions

Unfortunately it's 2 years from the date of discharge.

Jan 2nd 2013
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Steven Ceceri (CreativeFinancingOptionsGroup)
#36 ranked lender in Massachusetts - 723 contributions

What type of mortgage do you have currently (ie, FHA, VA, USDA, Fannie, Freddie)? When did the BK Begin and what is the Mortgage History since the BK Started and 12 Months Prior to it beginning? Has your mortgage been modified in the past?

Jan 2nd 2013
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Kevin Prince (KevinPrince)
#67 ranked lender in Pennsylvania - 26 contributions

You can do a private money loan but you would have to have 40% down and the rate will be around 10%. Your best course of action would be wait until the 2 year waiting period is up and work on getting your credit score up over 720. At that time you can apply and get much better terms. If you need more information or if I can clarify anything else for you please eat me know. Kevin Prince, SVP, Liberty One kprince@liberty1amc.com, 858-926-8904

Jan 2nd 2013
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Lorne Harvey (lorneharvey)
#80 ranked lender in Washington - 431 contributions

Per FHA, you should be abe to apply for a new mortgage one day after your chapter 13 is dismissed/discharged. Your lender would most likely need "approve/eligible" automated findings, and no late payments since filing.

Jan 3rd 2013
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Phil Dumouchel (PhilDu)
#32 ranked lender in South Carolina - 2,246 contributions

If you've made your payments on time and have permission from the court it is possible to get a FHA mortgage before May. Your credit outside of the BK will also need to be pretty close to perfect as well. Any late payment or collection might kill the approval.

Jan 3rd 2013
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