In this article, we will cover and discuss getting approved for a new home loan after having a prior mortgage included in Chapter 7 Bankruptcy. There are instances where people will include a home loan when they file for bankruptcy. There are waiting period requirements after a bankruptcy and foreclosure. However, what is the waiting period if you have both a bankruptcy and foreclosure at the same time? In the following paragraphs, we will further discuss how to qualify for a home loan with a mortgage included in Chapter 7 Bankruptcy.
Is It Hard To Buy A House After Filing Bankruptcy?
There are many folks who can no longer afford their mortgage payments on their current home and file bankruptcy and have the foreclosure part of the bankruptcy. People that file bankruptcy and have their foreclosure part of bankruptcy will one day become homeowners. However, many folks who have the foreclosure part of bankruptcy are facing a major dilemma. The deed is still in their name and not the mortgage lender’s name. There are waiting period requirements after a bankruptcy and foreclosure in order for a person to be able to qualify for a residential mortgage loan.
Mortgage Waiting Period Guidelines After Bankruptcy And Foreclosure
The minimum waiting period for someone to qualify for a residential mortgage loan after a bankruptcy is two years from the discharge date of the bankruptcy. The minimum waiting period for someone to qualify for a residential mortgage loan after a foreclosure is three years. The waiting period start date is from the date the foreclosure is transferred out of the borrower’s name and into the mortgage lender’s name. When a foreclosure is part of the bankruptcy, the waiting period time clock starts on the date the foreclosure is out of the borrower’s name and into the lender’s name.
Waiting Period Start Date For Home Loan With Prior Mortgage Included in Bankruptcy?
Just because the foreclosure is part of the bankruptcy does not transfer the deed out of the borrower’s name into the mortgage lender. The foreclosure part of bankruptcy will wipe out the mortgage. But the deed is still in their name. As soon as bankruptcy is finalized, consumers need to make sure that the bank has transferred the title to their name and out of homeowners. I have so many folks who had their foreclosure part of bankruptcy many years ago but the deed is still in their name. So their waiting period has not even started yet. These folks still need to wait three years from the date the deed is transferred out of their name.
What If Lender Does Not Change Deed After Foreclosure To Their Name?
Many of these folks have made countless phone calls to their lenders. Their lenders are not cooperating and are in no hurry in getting the deed into their name. Technically, homeowners own the home free and clear if the mortgage was included in bankruptcy. This holds true because the bankruptcy wiped out the mortgage loan balance. However, if the lender finds out that the homeowner on the deed is selling their home, the lender will react. The title is technically in the homeowners name and there is no mortgage. The mortgage has been discharged in the bankruptcy.
Quick Fix Of Getting Name Out Of Deed
As mentioned earlier, if a homeowner has a foreclosure included in the bankruptcy and is still on the title, the mortgage is wiped out. The homeowners no longer owe the mortgage lender a loan balance. Lenders should be in a hurry to get the title transferred in their name. However, most are not. They often do not care about transferring the deed out of the homeowner’s name. Mortgage lenders know delaying transferring the deed out of the lender’s name will be hurting homeowners. Those who have made countless unreturned phone calls making this request with the lender not cooperating should try selling the home.
When Can I Qualify For a Mortgage After Including The Mortgage in a Bankruptcy?
I suggest that you write a certified letter to the lender stating if they do not transfer the title into their name that the property will be listed and sold. Technically homeowners can keep all the proceeds from the sale. This certified letter will alert the lender that you can legally do that and you will most likely see some action. I have never seen a case where a homeowner does this where they kept all of the proceeds from the sale. But I have seen many lenders act fast in transferring the borrower’s name off the title and into theirs and recording it.
Update On Mortgage Included In Chapter 7 Bankruptcy
Those who had a Mortgage Included In Chapter 7 Bankruptcy, may now qualify for a conventional loan four years from the date of your discharge date of Chapter 7 Bankruptcy. The housing event needs to have been finalized. Foreclosure, deed in lieu of foreclosure, and/or short sale can be recorded at a later date past the discharged date of the Chapter 7 Bankruptcy discharged date.
The waiting period to qualify for a mortgage with a prior Mortgage Included In Chapter 7 Bankruptcy applies only for conventional and VA loans. This does not apply to FHA and USDA Loans. Mortgage Included In Chapter 7 Bankruptcy on government loans, the waiting period starts from the recorded date of the foreclosure, deed in lieu of foreclosure, or short sale date.
Best Mortgage Lenders With No Overlays on Conventional Loans
Home Buyers who had Mortgage Included In Chapter 7 Bankruptcy and have passed the four-year waiting period and need to qualify for conventional loans with a national mortgage company licensed in multiple states with no lender overlays on government and/or conventional loans, please contact us at Gustan Cho Associates at 800-900-8569 or text us for a faster response. Or email us at firstname.lastname@example.org. The team at Gustan Cho Associates is available 7 days a week, on evenings, weekends, and holidays.