Guidelines On Mortgage Part Of Bankruptcy

Guidelines On Mortgage Part Of Bankruptcy

Gustan Cho Associates

Qualifying Guidelines On Mortgage Part Of Bankruptcy:

Mortgage Lending Guidelines with regards to mortgage part of bankruptcy is different for all mortgage loan programs.  FHA has its own mortgage lending guidelines with regards to lending guidelines on mortgage part of bankruptcy.  Fannie Mae has just came up with new mortgage lending guidelines with regards to guidelines on mortgage part of bankruptcy.

If a mortgage loan debt was discharged through a Chapter 7 bankruptcy, the mandatory waiting periods after a bankruptcy discharge date may be applied if the mortgage lender can obtain the proper paperwork and  documents to confirm that the mortgage loan obligation of the mortgage loan borrower has been discharged in the bankruptcy. Otherwise, the greater of the applicable Chapter 7 bankruptcy and/or foreclosure  mandatory waiting periods must be applied.

FHA Guidelines On Mortgage Part Of Bankruptcy

To qualify for a FHA Loan if you have a mortgage part of bankruptcy, the waiting period starts from the recorded date of the bankruptcy and not the discharge date of the bankruptcy.  For example, if you filed bankruptcy in June of 2010 and you included your mortgage as part of your bankruptcy and the discharge date of your bankruptcy was October of 2010 but your foreclosure did not get recorded until October of 2012, the waiting period to qualify for a FHA Loan starts 3 years from the October 2012 recorded date of your foreclosure.  Even though the mortgage loan balance was wiped out from your Chapter 7 bankruptcy, the waiting period does not start from the recorded date the deed was transferred out of your name into the name of the mortgage lender.

Guidelines On Mortgage Part Of Bankruptcy For Conventional Loans

The mandatory waiting period to qualify for a conventional loan is 4 years from the date of the bankruptcy discharge date.  The great news with Fannie Mae conventional loan programs is that if you had a mortgage part of bankruptcy, the waiting period starts from the discharge date of your bankruptcy and not the recorded date of the foreclosure.  The foreclosure can be recorded past the discharge date of the bankruptcy.  For example, if you filed bankruptcy on January of 2010 and the bankruptcy was discharged in May 2010 and had a mortgage part of bankruptcy and the foreclosure was not recorded until January 2013, the 4 year waiting period starts from the discharge bankruptcy date of May 2014.  This is a new Fannie Mae guidelines on mortgage part of bankruptcy which will enable home buyers who had their foreclosures recorded at a later date than the date of their discharged bankruptcy dates.

 

Derogatory Event Status Waiting Period Requirements to Qualify for Conventional Loan Waiting Period with Extenuating Circumstances per Fannie Mae Guidelines
Bankruptcy — Chapter 7 or 11 Filing 4 years from Bankruptcy Discharge Date 2 years from the bankruptcy discharge date
Bankruptcy — Chapter 13 Filing
  • 2 years from discharge date of the Bankruptcy Date of the Bankruptcy
  • 4 years from dismissal date of the Chapter 13 Bankruptcy
  • 2 years from discharge date of the bankruptcy.
  • 2 years from dismissal date of the Chapter 13 date of the Bankruptcy
Multiple Bankruptcy Filings 5 years if more than one filing BANKRUPTCY  within the past 7 years 3 years from the most recent discharge or dismissal date of bankruptcy
Foreclosure1 7 years from the recorded date of the foreclosure which is reflected on the county records or the date of the sheriff’s sale 3 years from the recorded date of the foreclosurewhichis reflected on county records or the date of the sheriff’s sale.Additional requirements after 3 years up to 7 years:

  • 90% maximum LTV ratios2
  • Purchase, principal residence
  • Limited cash-out refinance, all occupancy types
Deed-in-Lieu of Foreclosure, Preforeclosure Sale, or Charge-Off of Mortgage Account 4 years from the recorded date of the deed in lieu of foreclosure or the 4 years from the date of the short sale which is reflected on the HUD-1 Settlement Statement. 2 years

 Related> Mortgage part of Bankruptcy

Related> 2015 waiting period guidelines on bankruptcy

Related> FHA Back to Work Mortgage

 

The information contained on Gustan Cho Associates website is for informational purposes only and is not an advertisement for products offered by The Gustan Cho Team @ Gustan Cho Associates or its affiliates. The views and opinions expressed herein are those of the author and/or guest writers of Gustan Cho Associates Mortgage & Real Estate Information Resource Center website and do not reflect the policy of Gustan Cho Associates Lenders Network, its officers, subsidiaries, parent, or affiliates.

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