Tuesday, May 20, 2014 - Article by: Lender411 Member
In the past, filing for bankruptcy disabled a once borrower from home ownership through financing; but the rules of the game are changing, and today, even those who recently came out of a bankruptcy episode may be approved when applying for a home loan. Specially after the subprime lending crisis, government institutions were the first ones to help borrowers who experienced financial difficulties get back into financing their home purchases.(1) Albeit more expensive, if you have an instance of bankruptcy in your credit history, you can get financing.
Financing the purchase of your home is still a possibility, and I am not talking about subprime lenders, for individuals who had a good credit history before the bankruptcy episode, and who followed the plan appointed by court. Today, there are programs that allow a recent bankrupt borrower get financing two years after the event. You may be required to attend housing counseling, but if you can show full recovery, you can qualify.
Bankruptcy is a legal process that allows you to eliminate or repay your debts. If you file bankruptcy, the court takes control over your assets, and stops all collection actions. The court also decides which debts will be forgiven, and which debts will require payment. There are various types of bankruptcy filings, some allow the dismissal of debts, and other allow the restructuring of debts and a payment plan which the debtor can afford.
Types of Bankruptcy Filings:
Chapter 7 Bankruptcy:
Chapter 13 Bankruptcy:
Chapter 11 Bankruptcy:
Chapter 12
The makeup of our economy is changing, and it is possible that even good borrowers may find themselves in trouble due to unforeseen loss of employment, a dramatic downturn of the economy, a disease, etc. However, how you respond to financial difficulties will greatly influence how fast or battered you come out. Filing bankruptcy is not an ideal solution when you are unable to pay your debts; but when that is the only way to get through, a proactive approach, and fulfilling the plan you agree to in court may help you recover from the bad episode, and leave it behind. Our society is really far better than medieval times when delinquent borrowers were taken to debt houses, and left there to rot. If you are a struggling borrower, or if you experienced a financial hardship that scarred your credit history, have an honest conversation with your mortgage expert, and you may be able to pursue the American Dream just like everybody else.
1) http://www.infobytesblog.com/wp-content/uploads/2013/08/HUD-Mortgagee-Letter-2013-26.pdf#page=2
Nations Lending Corporation differentiates itself through its common sense underwriting. We make it our mission to carefully look at every loan application. Our mortgage branch opportunities feature average 28-day closings with minimum overlays. As a mortgage banker with direct agency, we do not offer a mortgage net branch, but we are a far better alternative than any mortgage net branch opportunity out there. Visit our website to learn more.
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