Mortgages After Bankruptcy Lending And Qualification Guidelines

Homebuyers Can Qualify For Mortgages After Bankruptcy

This Article Is About Mortgages After Bankruptcy Lending And Qualification Guidelines

Homebuyers can qualify and get approved for mortgages after bankruptcy. Bankruptcy will not affect your mortgage rates or the terms of the loan. Gustan Cho Associates has helped countless borrowers get credit scores over 700 in less than one year after their bankruptcy discharged date. Bankruptcy is a federal law where it helps consumers who are drowning in debt a fresh financial start in life. There are waiting period requirements on government and conventional loans after bankruptcy and foreclosure. The waiting period differs depending on the loan program. When a homeowner files bankruptcy and has their mortgage included in the bankruptcy, the waiting period requirement start period starts from the discharged date of the bankruptcy and not the foreclosure on conventional loans. The date of the housing event does not matter on conventional loans. However, with FHA loans, the waiting period start date is the date of the finalization of the housing event (foreclosure, deed in lieu of foreclosure, short sale) and the discharged date of the bankruptcy does not matter. Gustan Cho Associates offers non-QM mortgages one day after bankruptcy with a 30% down payment. In this article, we will discuss and cover qualifying for mortgages after bankruptcy.

There Two Types Of Bankruptcies

What are the two types of bankruptcy

Chapter 7 Bankruptcy :

A Chapter 7 Bankruptcy is called total liquidation where it applies to consumers who have a lot of unsecured debt and little to no income. There is a maximum annual income limit for you to meet in order to qualify for a Chapter 7 Bankruptcy.

Chapter 13 Bankruptcy Repayment Plan :

  • In order to qualify for a Chapter 13 Bankruptcy, petitioners need to be employed with a stable income
  • This is because a percentage of income is deducted and allocated to pay creditors for a certain period
  • Most Chapter 13 Bankruptcy Plans are for 60 months or 5 years

After the Chapter 13 Bankruptcy Repayment Period is over, the remaining unpaid debts owed is discharged on the Chapter 13 Bankruptcy and are no longer liable for the balance.

How Can I Qualify For Mortgages After Bankruptcy?

Borrowers Can Qualify For Mortgages After Bankruptcy:

    • However, there are mandatory waiting periods to be eligible to qualify for government and Conventional Loans 
    • FHA, VA Loans, and Conventional mortgages after bankruptcy require mandatory waiting period requirements after both types of bankruptcies
    • Gustan Cho Associates Mortgage Group offers NON-QM Loan
  • Borrowers can qualify for NON-QM Loans one day out of bankruptcy, short sale, foreclosure, and deed in lieu of foreclosure with no waiting period requirements

Here are the waiting period requirements to qualify for mortgages after bankruptcy for FHA, VA, and Conventional Loan:

Mortgage Guidelines After Bankruptcy

How Can I Qualify For FHA Insured Mortgages After Bankruptcy?

  • Homebuyers can qualify for FHA and VA mortgages after bankruptcy in two years after a Chapter 7 Bankruptcy discharged date
  • Minimum Credit Scores Required is 580 
  • No late payments history after the discharged date of the Chapter 7 Bankruptcy
  • Re-Established Credit After Chapter 7 Bankruptcy discharged date

How Can I Qualify For Conventional Mortgages After Chapter 7 Bankruptcy?

Can home buyers qualify for conventional mortgages after bankruptcy?

Home Buyers can qualify for Conventional Mortgage after bankruptcy in four years after the Chapter 7 Bankruptcy discharged date. The minimum credit score required to qualify for Conventional Loans is 620. No Late Payments after Chapter 7 Bankruptcy discharged date. The maximum Debt To Income Ratio allowed with Fannie Mae is 50% DTI. Freddie Mac has a maximum debt to income ratio cap of 50% DTI.

Qualifying For VA Mortgages After Bankruptcy

Home Buyers can qualify for VA Mortgages After Bankruptcy two years after Chapter 7 Bankruptcy discharged date. Veteran Home Buyers need to have re-established credit after the Chapter 7 Bankruptcy discharged date. No late payments after the discharged date of Chapter 7 to qualify for mortgages after bankruptcy with VA Loan. Gustan Cho Associates Mortgage Group has no overlays on VA Loans but does require a 580 Credit Score.

How Can I Qualify For Mortgages After Bankruptcy?  Chapter 13 Bankruptcy

Homebuyers can qualify for FHA and VA Loans during Chapter 13 Bankruptcy bankruptcy one year into a Chapter 13 Bankruptcy Repayment Plan with the approval of their Chapter 13 Bankruptcy Trustee. There is no waiting period after a Chapter 13 Bankruptcy discharged date to qualify for mortgages after bankruptcy. Gustan Cho Associates Mortgage Group is a five-star national 5-star mortgage company licensed in multiple states with no lender overlays on government and conventional loans. All Chapter 13 Mortgages After Bankruptcy and During Bankruptcy are Manual Underwriting. Gustan Cho Associates is known nationally for being able to close other lenders cannot close.

Mortgages After Bankruptcy: Bankruptcy Process

What is bankruptcy

Bankruptcies are great tools for consumers to use to get out of debt and get a fresh financial start. A bankruptcy will temporarily drop credit scores but credit will boost back up in a rather short period of time by re-establishing credit. There are many ways of re-establishing credit. Adding positive credit such as getting secured credit cards is the easiest and fastest way of re-establishing credit.

Below Is A General Scope Of The Typical General Bankruptcy Process

A bankruptcy attorney will guide their clients during the bankruptcy process. The attorney will guide clients if it is recommended to contact all or some of creditors in the event if intentions are preventing eviction by the country sheriff’s department. Or in the event, if creditors are trying to do a wage garnishment from an employer or go after assets, especially bank accounts. Another situation to resolve is contacting creditors. If the auto has been repossessed and needs to get it back or in the event of getting a driver’s license due to a suspension of not paying fines. There are many instances when urgency is not necessary due to the fact that an automatic stay will resolve this and any other potential actions. In cases when properties are planned on being started for a foreclosure process or in the event of an entry of judgment such in cases of lawsuits that have been initiated after the filing of a bankruptcy.

Bankruptcies Will Halt Foreclosure And Other Debt Collections Process

Many bankruptcy attorneys halted foreclosures during the foreclosure process due to the consumer filing bankruptcy. Or just prior to the start of the foreclosure process. The are many circumstances when the foreclosure starts and progresses due to not giving enough time for notice. The sale of the property is reversed and judgments against the debtor are reversed and/or vacated. Do not stress out about filing bankruptcy. Bankruptcy is a federal law that protects consumers drowning in debt. Gives them another chance at a fresh financial start in life and petitioners can definitely qualify for mortgages after bankruptcy.

How Do Creditors Get Alerted Of A Consumer’s Bankruptcy?

When a consumer files for bankruptcy, they are required to name a list of all creditors on their bankruptcy petition.

Here Are Some Bullet Points On How Creditors Get Alerted Of A Consumer’s Bankruptcy

The bankruptcy attorney will be required to name and list all the creditors who have or may have claims on the consumer filing bankruptcy.

There are many cases where the bankruptcy attorney will be required to name and list of debtors such as the following:

  • U.S. Internal Revenue Service
  • The county in the event if there are potential real estate property tax issues
  • Utilities such as the water and sewer department where the property is responsible for its services

Governmental agencies to get information on possible fines owed by the consumer such as the following:

  • Parking tickets
  • Traffic tickets
  • Building code violations
  • Other debts owed to the municipality

After the list of all of the consumer’s creditors has been gathered and compiled and stated on the bankruptcy petition, bankruptcy will be filed by an attorney:

  • A bankruptcy petition will send out a notice to the list of creditors via email and/or mail
  • The bankruptcy attorney normally doesn’t send out bankruptcy filing notice to all of the creditors
  • In the event and/or case where one or more creditor has not been included in the original initial bankruptcy filing, a bankruptcy lawyer will need to do an amendment to hour schedules
  • The bankruptcy attorney will then mail this change of circumstances
  • The addition of creditor and/or creditors to the creditors in question

The Bankruptcy Courts charges a fee for this service of amending bankruptcy petition to add creditors that were not initially included in the original initial petition.

Are Consumers Responsible For Debts That Were Not Listed On Chapter 7 Bankruptcy?

Consumers Are Required To Name And List All Their Creditors On Their Bankruptcy Petition. However, the Bankruptcy Process is a stressful process. The bankruptcy petitioner may not have all of their paperwork in order and may not remember to list all of their creditors. There are many instances where the bankruptcy petitioner may forget to list one or more of the debts they owe to creditors, therefore, not list the creditor or creditors.

Mortgages After Bankruptcy: Here How Omission Of Creditors Work During Bankruptcy Process

Here How Omission Of Creditors Work During Bankruptcy Process

Omitting creditors on bankruptcy petition happens. Omitting creditors on bankruptcy petitions does not mean that the bankruptcy petitioner is liable for the debts of the creditor he or she did not list as a creditor on their bankruptcy petition. Omitting creditors on bankruptcy petition does not mean that the creditor’s debts cannot be discharged. The probability of creditors and debts not listed and omitted on the bankruptcy petition being discharged is very good. Creditors and Debts that are normally not discharged due to the debtor omitting the debt and creditor on their bankruptcy petition are the various types of debts that do not fall into dischargeable credits and debts.

Debts That Cannot Be Discharged In Bankruptcy

Examples of creditors and debts that cannot be discharged in bankruptcy include the following:

  • Federal student loan debts
  • Income taxes
  • Child support and alimony payments
  • International torts
  • Debts incurred due to fraud committed by the debtor
  • Government fines
  • International torts

These types of debts can sometimes become complicated due to the fact that there are cases where non-dischargeable creditors must file an objection to discharge. Or a special complaint to determine whether or not if their debts are non-dischargeable under the laws of the U.S. Bankruptcy Code. Examples of case scenarios on the above situations happen on cases where creditors file case reports on international torts such as cases of battery, false imprisonment, assault, and other similar cases. Omitting debts of this type from the petition of the bankruptcy filing may result in the outcome of debt not being able to be discharged from bankruptcy and may still being liable for the liability. However, in most cases, the bankruptcy attorney can amend the bankruptcy petition to include the creditor that was not included.

 Creditors Not Included In Bankruptcy Petition

In cases where the creditor that was omitted from bankruptcy petition such as the following:

  • Revolving credit card company that did not include cash advances initiated and transacted by Consumer
  • And/or extravagant luxury credit card purchase transactions just prior to filing bankruptcy (cases like these may be deemed potential fraud )
  • Then the chances of it being discharged with bankruptcy are very likely 
  • This holds true even though it was not listed and claimed on the bankruptcy petition and no formal notice was mailed/sent or not to the creditor

If a creditor was not included in the bankruptcy petition, the bankruptcy attorney can go back and amend the petition to include the creditor that has not been included.

Amending Bankruptcy Petition

In the event, if the debt owed to a creditor is classified under an international tort classification and/or category, the petitioner needs to have bankruptcy petition amended. Need to send official notice of the bankruptcy filing/amendment to the creditor in the event the creditor is aware that the petitioner is filing bankruptcy. Whether or not the creditor wants to claim an objection to the discharge of the debts that are owed creditors.

How Soon Can I Re-Establish My Credit And Qualify For Mortgages After Bankruptcy

Many consumers believe that bankruptcy will ruin their credit and will have a rather difficult time getting credit after bankruptcy. There are many folks who still believe that it is next to impossible to get mortgages after bankruptcy. This is not the case and borrowers can qualify for mortgages after bankruptcy rather easily and as soon as two years. People who filed Chapter 13 Bankruptcy can qualify for FHA mortgages after bankruptcy one year into the Chapter 13 Bankruptcy Repayment Plan with Trustee approval. They need to have been timely on their payments for the preceding 12 months.

Mortgages After Bankruptcy Loan Programs

Gustan Cho Associates Mortgage Group offers the following:

  • FHA Loans with no overlays
  • Home Buyers can qualify for FHA Mortgages After Bankruptcy one year after filing Chapter 13 Bankruptcy
  • No waiting period after Chapter 13 Bankruptcy discharged date
  • FHA Mortgages 2 years after a Chapter 13 Bankruptcy discharged date
  • Conventional Mortgages After Bankruptcy 4 years after Chapter 7 Bankruptcy discharged date
  • Conventional Mortgages After Bankruptcy 2 years after Chapter 13 Bankruptcy discharged date
  • VA Loans with no overlays
  • VA Mortgages After Bankruptcy after 2 years of discharge date
  • VA Mortgages After Bankruptcy after 2 years after foreclosure, deed in lieu of foreclosure, short sale
  • USDA Mortgages with no overlays
  • NON-QM Loans one day after bankruptcy and/or foreclosure
  • Gustan Cho Associates is licensed in multiple states and has zero lender overlays on government and conventional loans.
  • Gustan Cho Associates business platform and mission is to close loans in 21 days

Home Buyers and Homeowners who need to qualify for a mortgage with a mortgage company licensed in multiple states with no lender overlays on government and conventional loans can contact us at Gustan Cho Associates at 262-716-8151 or text us for a faster response. Or email us at [email protected] The team at Gustan Cho Associates is available 7 days a week, evenings, weekends, and holidays.

2 Comments
  1. Gustan Cho says

    Chad Hayward of Hayward Law Offices is one of the fastest growing law firms in the Chicagoland Area specializing in Bankuptcies and Real Estate. Julie Hayward, Chad Hayward wife is the Managing Broker and President of EDGE REALTY LLC a top producing full service real estate brokerage firm based in Chicago and Suburbs with a five star reputation for its spectacular customer service and support for not just home buyers and sellers but for loan officers and other real estate industry professionals seeking expert advice on all types of real estate related matters.

    Gustan Cho NMLS 873293
    The Gustan Cho Team at CrossCountry Mortgage Inc NMLS 3029
    Area Manager

  2. Gustan Cho says

    I like to congratulate Bob Vogel NMLS 873293 of The Gustan Cho Team at CrossCountry Mortgage Inc NMLS 3029 for being named Editor in Chief of California-Loans Mortgage & Real Estate Information Resource Center. Bob Vogel of CrossCountry Mortgage Inc NMLS 3029 is taking on the role of Editor In Chief of California-Loan Mortgage Information Resource Center although he is still Editor In Chief of Loan Consultants Mortgage & Real Estate Information Resource Center as well as an Associate Staff writer for Gustan Cho Associates Mortgage & Real Estate Information Resource Center.

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