Mortgage With Late Payments After Bankruptcy And Foreclosure

Mortgage With Late Payments After Bankruptcy And Foreclosure

Gustan Cho Associates are mortgage brokers licensed in 48 states

This Article Is About Mortgage With Late Payments After Bankruptcy And Foreclosure

Borrowers with outstanding collections charged-off accounts, and late payments can qualify for home loans. Lenders understand and have no problems approving a borrower with prior bad credit, bankruptcy, foreclosure, deed in lieu of foreclosure, short sale, or period of bad credit. However, lenders want to see borrowers have rebuilt and reestablished their credit after a period of bad credit. Outstanding collections and/or charged-off accounts do not have to be paid to qualify for a home mortgage. You can qualify for a mortgage after bankruptcy and/or after a housing event. However, there are minimum waiting period requirements to qualify for a mortgage after bankruptcy and/or a housing event. The waiting period requirement depends on the loan program. Just passing the mandatory waiting period after bankruptcy, foreclosure, deed in lieu of foreclosure, short-sale does not mean you can automatically qualify for a home mortgage. Lenders want to see the borrower has rebuilt and reestablished their credit. There cannot be any late payments after bankruptcy and/or foreclosure. However, one or two late payments are not always a deal killer.

Can I Qualify For A Mortgage With Late Payments After Bankruptcy And Foreclosure With An AUS Approval

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Late payments after bankruptcy and/or foreclosure are really frowned upon by lenders. Most lenders consider consumers with late payments after bankruptcy and foreclosure second offenders. The term second offender refers to the mortgage loan applicant as financially irresponsible and a habitual late payer and bad credit risk. However, there are ways of getting an approve/eligible per automated underwriting system (AUS) with one or two late payments after bankruptcy and/or foreclosure. Even if you get an approve/eligible per AUS, most lenders will not accept borrowers if they had any late payments after bankruptcy and/or foreclosure. Most lenders will have lender overlays on late payments after bankruptcy and/or a housing event. However, Gustan Cho Associates has no lender overlays. As long as the borrower can get an approve/eligible per automated underwriting system, Gustan Cho Associates will approve and close on your home mortgage. We have zero lender overlays. 

Importance Of Timely Payments And Payment History After Period Of Bad Credit

Borrowers do not have to pay outstanding collections and charged-off accounts to qualify for home loans: Lenders will require 12 months of timely payments. Automated Underwriting System will only approve borrowers with timely payments in the past 12 months. It is possible to get an approve/eligible per Automated Underwriting System Findings with one or two late payments in the past 12 months. However, qualifying for Mortgage With Late Payments After Bankruptcy and/or Housing Event is a totally different story. It is not impossible to get an approve/eligible per Automated Underwriting System with late payments after bankruptcy and/or foreclosure. However, most lenders will not want to approve any borrowers with late payments after bankruptcy and/or foreclosure even with AUS approval due to their overlays. Gustan Cho Associates is a national mortgage company licensed in multiple states with no overlays on government and conventional loans. Gustan Cho Associates can approve and fund loans with late payments after bankruptcy and/or foreclosure with an automated underwriting system approval. Gustan Cho Associates has zero lender overlays on government and conventional loans.

Qualifying For Mortgage After Bankruptcy And Foreclosure

A Chapter 7 Bankruptcy is a federal debt relief law that a consumer can use to wipe out all or most of their debts and have a fresh start on their financial life.  Debts such as credit card debts, judgments, installment loans, personal debts, and other non-government debts can be discharged through a Chapter 7 Bankruptcy. The only debts that cannot be discharged in Chapter 7 Bankruptcy are federal debts such as federal student loans and debts that were related to fraud. Chapter 7 Bankruptcy is a great tool for consumers who are overwhelmed in debts due to an economic event such as unemployment, loss of business, divorce, medical reasons, or other extenuating circumstances. Once the bankruptcy is discharged, you no longer owe anyone and can have a fresh start without any debts. 

Debts That Cannot Be Discharged In Bankruptcy

Debts That Cannot Be Discharged In Bankruptcy

There are certain debts that cannot be discharged through a Chapter 7 Bankruptcy such as the following:

  • student loans
  • government loans
  • child support payments
  • tax debts
  • tax liens
  • Once a debt from a creditor is discharged through bankruptcy, the consumer no longer owes the debt
  • They are no longer responsible to pay that debt
  • All unsatisfied judgments also get discharged
  • Consumers do not have to worry about getting any future collection activities from the judgment creditor such as wage garnishments, bank levy, or have liens placed on their assets
  • Homebuyers can qualify for Mortgage With Late Payments After Bankruptcy and foreclosure after meeting the waiting period requirements
  • However, late payments after bankruptcy and foreclosure are often frowned upon by all lenders

Late payments after bankruptcy can be deal killers in getting qualified for home loans after bankruptcy.

Qualifying For Home Loan After Bankruptcy

People can definitely get a home loan after bankruptcy and the majority of folks who filed bankruptcy eventually have become homeowners in as little as two years from their bankruptcy discharged date with FHA and VA Home Loans:

  • One of the major issues where getting a home loan after bankruptcy becomes a major issue is if borrowers had late payments after bankruptcy
  • It is possible to qualify for Mortgage With Late Payments After Bankruptcy and Foreclosure

Most mortgage companies will disqualify applicants who had late payments after bankruptcy and foreclosure as well as those with late payments after a short sale.

Late Payments After Bankruptcy And Housing Events Are Not Deal Killers

Lenders are more than happy to lend on borrowers with prior bankruptcies but not late payments after bankruptcy and/or housing events. Lenders do expect that they do not have any late payments after bankruptcy. Lenders want to see re-established credit after bankruptcy and foreclosure and steady employment. Just because borrowers have good credit scores after bankruptcy and foreclosure does not meet the credit criteria. Credit history and payment history after bankruptcy and foreclosure will carefully be analyzed and reviewed as well.

Denied For Mortgage With Late Payments After Bankruptcy And Foreclosure

I have many calls from borrowers who are told by lenders that they do not qualify for a home loan and will never qualify for a home loan because they had late payments after bankruptcy and foreclosure. Many lenders will not budge on this rule. They will automatically disqualify borrowers who had late payments after bankruptcy and foreclosure. However, there are solutions to overcome this major issue. I have helped countless borrowers with late payments after bankruptcy and foreclosure. If told that you do not qualify for a mortgage due to late payments after Bankruptcy and Foreclosure, please contact us at Gustan Cho Associates at 800-900-8569 or text us for a faster response. Or email us at gcho@gustancho.com so I review the overall credit profile and see if we can come up with a solution that will fit and suit the credit profile and implement them so we can qualify for a home loan.

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One Comment

  1. We have a discharged bankruptcy in 2015 but a few late payments On a closed account afterwards. We have been trying to get approved for about 2 years from several different loan companies. I just found out that bankruptcy and late payments automatically disqualified us. Is there a chance to get an approval with your company? I was referred to Gustan Cho Associates from a loan officer who rejected us for having late payments after bankruptcy. The loan officer told me Gustan Cho Associates can help me when his mortgage company cannot because they have lender overlays on late payments after bankruptcy.

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