Forgotten Your Password?

Need to Register?

Question Icon

Do I qualify for a purchase loan? (2 yrs out of bankruptcy property modified)

I am 2 years out of bankruptcy - Chapter 7. The property was included in the bankruptcy- but I have continued to make payments on the property. Lender has not reported anything to credit report since the bankruptcy. I had to move due to a new job and I have rented out the property. Do I qualify to buy a new house? I had talked to a mtg banker and he had received DU Approve/Eligible - but his underwriter was not comfortable with it. Any recommendations on what could be the cause or how to go about a loan greatly appreciated. Thanks. State is Texas. by ron420 from Fort Worth, Texas. Jan 6th 2013 Reply


Edgar Aranda (earanda)
#752 ranked lender in California - 93 contributions

FHA is the route to go with this situation. 3.5% down payment will be required

Jan 7th 2013
1
0
William J Acres (William_Acres)
#73 ranked lender in Arizona - 8,726 contributions

You're going to have issues.. if the home was not reaffirmed, then even with DU/LP approval, you will have a hard time finding a lender to allow the new purchase to go through... Although the BK relieves you of any past debt owed against the property, you are at will to walk away from that home any time, and no one can do anything about it.. Since underwriting guidelines have specific rules in place for foreclosures, your situation is unique, in that you are no longer obligated for the debt, but the title has not been transferred.. I think your only option is to sell the rental.. if you short sell the home, and your employer is forcing you to move, then FHA has a mortgage product in place for you to obtain a new mortgage.. The best advice I can give you is to contact a LOCAL mortgage broker and apply with them. Do not use the local "Big" bank, or one of those 50 states internet lenders or nationwide lenders...By applying with your LOCAL Broker, you have an advantage because he's familiar with local customs and works with numerous lenders, seeking out the best loan terms for your particular scenario. Because he has lower overhead, he can offer you lower rates and lower fees than most of the larger lenders.. I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. 480-287-5714 WilliamAcres.com

Jan 7th 2013
1
0
Steven Ceceri (CreativeFinancingOptionsGroup)
#36 ranked lender in Massachusetts - 723 contributions

Hi Ron420! Can you provide me with information on your current mortgage, such as if you have any late payments prior to and up to today? Is your current mortgage a fannie/freddie, or fha loan? What type of property do you own now (ie. SF, 2-4 unit)? Where are you moving to in regards to distance from your existing house and is the house you are looking to purchase closer to your work than your existing house? With respect to your existing house, if you choose to rent it out, you will not be able to use any rental income to offset your existing mortgage and new mortgage unless your current property has at least 25% of Equity, which would be established by an actual appraisal. Anyway, it does get complicated as you can see and most originators/bankers are nervous to take on any risks as their names are on the line for these loans. I'd be happy to see what I could do for you if you are willing to share more details with me on this and send me any information you may have, including a copy of your current loan application and DU Findings to show the Approve/Eligible. You can visit my profile and send me a direct email and also visit my website if you are ready to apply! Thank you for your time and good luck!

Jan 6th 2013
0
0
Ken Burrows (mortgagesforamerica)
#20 ranked lender in Nevada - 572 contributions

With a DU Approve/Eligible you will be able to get financed. Let me know if we can help you in your new purchase. P: 888-320-7888 www.MortgagesforAmerica.org

Jan 6th 2013
0
0
Jeremy Redlinger (JeremyR)
#29 ranked lender in Minnesota - 191 contributions

If your current mortgage on the rental was not reaffirmed you may have some issues creating issues keeping your from purchasing a home. I might start digging into that first.

Jan 6th 2013
0
0

Current property was NOT reaffirmed in bk.

Jan 6th 2013
0
0
Jeremy Redlinger (JeremyR)
#29 ranked lender in Minnesota - 191 contributions

You may run into issues when trying to get a mortgage history to report to the lender and meet underwriting guidelines. Even though you are purchasing a new home they will want this history to verify payment history. I know this type of loan is pretty impossible to refinance as the homeowner is literally renting from the bank and can be foreclosed upon any late payment. Ask your loan officer if payment history on your current mortgage needs to be verified and go from there.

Jan 6th 2013
0
0
Michelle Curtis Loan Originator NMLS 401173 (EmbassyFundingLLC)
#77 ranked lender in Florida - 2,240 contributions

You should be able to qualify now for an FHA mortgage. You may want to check with a broker that can place your loan with a lender that has no overlays. Having filed a BK still makes you a riskier bet to lenders even though you have waited the two year period. Keep in mind the stronger your file the better chance you'll have of getting approved. The more liquid assets you'll have after close, amount of down payment, re-established credit will play a large role in your approval.

Jan 7th 2013
0
0
Phil Dumouchel (PhilDu)
#32 ranked lender in South Carolina - 2,246 contributions

As usual, the "devil is in the details". You need to select a knolwdgable and experienced mortgage lender to work with, one that will work your application regardless of the difficulties (summarized by others above). Ultimately there is no guarantee because any underwriter approving this loan is going to want plenty of "compensating factors" to justify their decision.

Jan 7th 2013
0
0

Do any of you guys do loans in Texas and able to handle this situation?

Jan 7th 2013
0
0
Subscribe to our news feed.