Buying Home With Bad Credit And Unpaid Collections


This Article On  Buying Home With Bad Credit And Unpaid Collections Was UPDATED And PUBLISHED On March 30th, 2020

The economy is still recovering from the Great Recession of 2008.

  • Home values and sales seem to have stabilized
  • Home prices are appreciating
  • Sales are growing year after year
  • Mortgage Lending seemed like it has stabilized
  • More and more first time home buyers are buying homes than ever before
  • Buying Home With Bad Credit And Unpaid Collections is definitely possible especially at Gustan Cho Associates
  • We have no overlays on government and conventional loans

In this article, we will discuss and cover Buying Home With Bad Credit And Unpaid Collections.

Economic Outcome And Impact On Home Buyers

After Donald Trump got elected President of the United States, the economy is exceeding expectations. Unemployment numbers and housing growth has been increasing to historical highs. There is a shortage of homes despite rising interest rates.

The current economic outlook is improving:

  • According to CNN Money, the current national unemployment rate is 4.0% down from 5.0% in October 2016
  • 4.2 million jobs have been added since February 2016  
  • The economy grew 2.4% in 2016 and 2017
  • The Federal Reserve speculates growth of at least 3% in 2018
  • With an improved economy comes increased consumer confidence
  • Americans are starting to loosen the reigns and enjoy shopping again
  • The sign of a healthy economy is when big ticket item sales increase

Whether it be appliances, new cars, or a new home, Americans are more confident about the economy and are more willing to spend.

Recovery Of Housing And Mortgage Markets

Recovering from a financial crisis takes time and financial and real estate experts say that this real estate and financial recovery was the longest recorded in history.

  • Filing for bankruptcy and losing a home to foreclosure or short sale can wreak havoc on an individual’s credit rating
  • However, the bad credit and drop in credit scores is a temporary negative factor
  • Most consumers can get their credit and credit scores back in track in a year
  • The ability to finance big-ticket items such as cars or getting a home loan can be a daunting task with an impaired credit rating
  • With patience and determination, an individual can get back on the right track to financial freedom and recovery
  • There are many government programs available to individuals who were directly affected by the recession
  • One of those programs is the FHA Loan Program

FHA has loose and relaxed lending guidelines for homebuyers who are Buying Home With Bad Credit And Unpaid Collections.

What Are Some Tips In Buying Home With Bad Credit And Unpaid Collections

Are you looking to purchase a home but is afraid to pull the trigger because a prior foreclosure, short sale, or recent bankruptcy will automatically disqualify you from getting approved for a loan?

  • Almost every American was affected by the Great Recent Recession of 2008
  • Many individuals experienced long periods of unemployment
  • They were unable to make their house payments and forced to decide between paying their utility bills and putting food on the table
  • Bankruptcy filings were at historical highs
  • Never in United States history were foreclosures as high as it was during this time period
  • Countless of hard-working Americans lost their businesses and jobs
  • As stated by the Federal Housing Administration (FHA), they understand the hardships faced by the affected borrowers
  • Lenders realize that their credit history does not adequately represent their ability to repay their mortgage

In light of these developments, the FHA has allowed for consideration of mortgage loans with credit scores down to 580 and made Buying Home With Bad Credit And Unpaid Collections possible.

Buying Home With Bad Credit And Relaxed Lending Requirements

The United States Department of Housing and Urban Development, HUD, is the parent of the Federal Housing Administration or FHA:

  • FHA makes Buying Home With Bad Credit And Unpaid Collections possible and it seemed reasonable and many seemed to qualify
  • There are hundreds of thousands of homebuyers who do not realize that Buying Home With Bad Credit And Unpaid Collections is possible
  • Many home buyers think you cannot qualify for an FHA Loan with outstanding collections and charge offs
  • This is not true
  • Borrowers can qualify for FHA Loans without having to pay off outstanding collections and/or charge off accounts
  • Gustan Cho Associates is a national mortgage company licensed in multiple states with no lender overlays
  • If a lender ends up funding an FHA Loan and cannot re-sell it on the secondary market, the lender ends up keeping the loan in their portfolio
  • This is not what they want to do
  • Lenders need to meet FHA Guidelines

Lenders need to sell loans they fund in order for them to clear up their warehouse lines of credit so that they can reuse their lines of credit to fund more loans.

Qualifying In Buying Home With Bad Credit And Unpaid Collections

HUD requires that borrowers with prior bankruptcies and foreclosures meet minimum waiting periods to qualify for an FHA Loan.

  • Waiting periods for occurrences such as bankruptcy is two year after the discharge date of the Chapter 7 Bankruptcy
  • Those one year into a Chapter 13 Bankruptcy can qualify one year into the Chapter 13 Bankruptcy Repayment Plan
  • There is no waiting period after a Chapter 13 Bankruptcy discharged date to qualify for a FHA Loan
  • Short sale, deed in lieu of foreclosure or foreclosure, have waiting periods of three years after the housing event to qualify for a FHA Loan

These rules are effective for FHA case numbers assigned  on or after August 15, 2013, through September 30, 2016.

About The Author Of Buying Home With Bad Credit And Unpaid Collections

Alex Carlucci is the author of Buying Home With Bad Credit And Unpaid Collections. Alex is a senior writer for Gustan Cho Associates.

  • Alex has over 20 years experience in individual income taxation and is an accounting professional with a Master’s Degree in Accountancy and an MBA
  • Alex is a mortgage loan originator at Gustan Cho Associates
  • Alex Carlucci has extensive experience in setting up accounting and financial records for new business start-ups
  • His experience includes seven years of audit work, 20 years of income tax preparation, and three years in tax debt settlement and negotiation
  • Alex Carlucci’s passion is helping others and being armed with her extensive accounting experience and being an expert in real estate and finance
  • Alex will be partnering up with Gustan Cho Associates
  • He is a full service mortgage banker specializing in FHA Loans, VA Loans, USDA Loans, Conventional Loans, FHA 203k Loans, Reverse Mortgages, Jumbo Mortgages, Non-Conforming Loans, and Commercial Loans
  • Alex’s specialty will be originating mortgage loans with no lender overlays

Gustan Cho Associates are experts in helping borrowers with bad credit qualify for home mortgages. If you have any mortgage lending questions and are considering a home purchase or mortgage refinance and like to go over case scenarios, feel free to contact us at Gustan Cho Associates at 262-716-8151 or text us for a faster response. Or email us at

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