Qualifying For Mortgage After Home Loan Part Of Chapter 7 Bankruptcy

This BLOG On Qualifying For Mortgage After Home Loan Part Of Chapter 7 Bankruptcy Was UPDATED On September 20th, 2017

Those who filed Chapter 7 Bankruptcy, there is a mandatory 2 year waiting period from the date of the discharge of bankruptcy in order for to qualify for FHA, VA, and USDA Loans.

  • Those who have a prior foreclosure, deed in lieu of foreclosure or short sale, there is a 3 year mandatory waiting period.
  • The waiting period is either from the date of the short sale or the recorded date of the foreclosure or deed in lieu of foreclosure. 
  • Remember that the waiting period time clock on a foreclosure or deed in lieu of foreclosure starts from the recorded date of the foreclosure or deed in lieu of foreclosure and not the date the homeowner turned the keys over or signed the foreclosure paperwork.  
  • Those who have home loan part of Chapter 7 Bankruptcy, the waiting period is two years after the discharge date of bankruptcy to qualify for FHA Loans.
  • But since the waiting period is three years for a foreclosure, mandatory period will be three years from the date of the recorded date of foreclosure and NOT the bankruptcy discharge date.

Problems That Can Arise If You Had A Home Loan As Part Of Chapter 7 Bankruptcy

Thousands of folks who have a foreclosure as part of their bankruptcy think that the foreclosure is finalized and that the waiting period starts the date of the bankruptcy discharge date.

  • That is not the case. 
  • Even a person had Home Loan Part Of Chapter 7 Bankruptcy have a foreclosure the foreclosure waiting period time clock does not begin until the foreclosure has been recorded on the county recorder of deeds and the foreclosure has been fully stamped and recorded. 
  • The note on mortgage might have been zeroed out and the homeowner may not owe anything on the note and have no liabilities but the foreclosure waiting period start date is not effective until the recorded date has been recorded. 
  • Many mortgage lenders are in no hurry in transferring the deed of foreclosed home into their name and recording it.

Qualifying For Mortgage After Prior Home Loan Part Of Chapter 7 Bankruptcy

There are dozens of calls I get everyday where folks had a home loan part of Chapter 7 Bankruptcy and have passed their 3 year waiting period but do not qualify for a mortgage loan because the mortgage lender has not transferred the deed out of the borrowers name into the lender’s name.

  • Some of these mortgage lenders have not even transferred the deed over their names even after 3 years. 
  • This ultimately hurts the person who had a home loan part of Chapter 7 Bankruptcy because their waiting period time clock has not even begun yet.

Delays In Transferring Deed By Lenders

Bankruptcy attorney should be responsible to make sure that the mortgage lender has transferred the deed to the lender’s name and have it record it on the county recorder of deed for those who had Home Loan Part Of Chapter 7 Bankruptcy.

  • Many bankruptcy attorneys did not do so and the client ends up getting hurt since it prolongs them qualifying for a mortgage loan. 
  • Those who had Home Loan Part Of Chapter 7 Bankruptcy and no longer owe any money on home. 
  • The house is free and clear. 
  • Homeowners offered the bank back the deed to home. 
  • However, mortgage lenders think they are smart and will try to punish homeowners by not transferring the deed back to their name and recording the deed in the county recorder of deeds. 
  • Technically, homeowners own the home free and clear without a mortgage since the note and Home Loan Part Of Chapter 7 Bankruptcy. 
  • If constant calls to the lender goes unanswered, write a certified letter to lender stating that you are planning on selling your home. 
  • List the home with a realtor and put it on the market. 
  • If the mortgage lender still does not respond to you and transfer the deed into their names, the house is yours. 
  • If the home sells and closes, technically, you are entitled to all of the proceeds to the home. 
  • I will bet any money that the lender will not let this happen and you will get a call back and have the deed to your home transferred over their name in a heart beat.

2017 Conventional Loan Update On Mortgage Part Of Bankruptcy

If you have a Home Loan Part Of Chapter 7 Bankruptcy , the waiting period to qualify for a conventional loan starts from the discharge date of bankruptcy and not the recorded date of foreclosure effective August 2014.

Gustan Cho NMLS ID # 873293

Related> Foreclosure Part Of Bankruptcy

Related> New Fannie Mae Guidelines On Foreclosure Part Of Bankruptcy

Related> Waiting Period If You Have Foreclosure Part Of Bankruptcy

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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