Qualifying For Mortgage After Bankruptcy And Foreclosure

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Qualifying For Mortgage After Bankruptcy And Foreclosure

This BLOG On Qualifying For Mortgage After Bankruptcy And Foreclosure Was UPDATED On August 1st, 2019

Qualifying For Mortgage After Bankruptcy And Foreclosure (1)

There is a mandatory waiting period after bankruptcy and foreclosure to qualify for a residential mortgage loan.

  • FHA requires a two year waiting period after the discharge date from bankruptcy and three years from the recorded date after a foreclosure or deed in lieu of foreclosure
  • FHA requires a 3 year waiting period after a short sale
  • The date three years waiting period after a short sale starts from the date of the short sale reflected on the HUD settlement statement

In this article, we will cover and discuss Qualifying For Mortgage After Bankruptcy And Foreclosure.

Fannie Mae And Freddie Mac Guidelines In Qualifying For Mortgage After Bankruptcy And Foreclosure

Fannie Mae And Freddie Mac Guidelines In Qualifying For Mortgage After Bankruptcy And Foreclosure

Fannie Mae has a mandatory waiting period of 4 years after bankruptcy for a mortgage loan applicant to qualify for a conventional loan.

  • There is a mandatory waiting period of 7 years from the recorded date of foreclosure to qualify for a conventional loan
  • For those with foreclosure as part of their bankruptcy, the waiting period is 4 years from the bankruptcy discharge date
  • This new rule was just implemented a few weeks ago
  • For those homebuyers with a prior deed in lieu of foreclosure or short sale, the mandatory waiting period is 4 years from the recorded date of the deed in lieu of foreclosure or the short sale date reflected on the HUD’s settlement statement

Removal Of Bankruptcy And Foreclosure Off Credit Report Via Credit Repair

Removal Of Bankruptcy And Foreclosure Off Credit Report Via Credit Repair

Does credit repair work?  Can you get bankruptcies and foreclosures removed off credit report?

Credit repair does work and I have seen some credit repair consultants that can remove not just collection accounts but the following:

  • Charge offs
    Late payments
  • Bankruptcies
  • Foreclosures
  • Deed in lieu of foreclosures
  • Short sales, judgments
  • Other public records off credit reports

Dangers With Removing Public Records Off Credit Reports

Dangers With Removing Public Records Off Credit Reports

Nothing is wrong with getting late payments, charge offs, collections removed off the credit report. However, deletion of public records will get discovered when lenders do a national third public records search.

  • Having the derogatory removed off credit reports will definitely look great and boost credit scores
  • However, when someone applies for a mortgage loan, they need to disclose  any public records such as bankruptcy, foreclosure, tax liens, judgments even if they are no longer reported on a credit report

I have personally witnessed bankruptcies and foreclosures completely deleted from a consumer’s credit report just months after they were recorded.

  • When borrowers apply for a mortgage, the mortgage application will specifically ask whether mortgage applicant has filed bankruptcy and/or had a foreclosure
  • This questionnaire that is on page 4 of 1003, the mortgage application, needs to be answered truthfully
  • Mortgage Loan Applicants who have gotten bankruptcy and/or foreclosure removed from the credit report and answer they have not filed bankruptcy and/or foreclosure on the questionnaire but have, this will get discovered when the lender does a national third-party public records search

Dangers Of Removing Public Records Off Consumer Credit Reports

Dangers Of Removing Public Records Off Consumer Credit Reports

Having bankruptcy and/or foreclosure removed from a credit report does not mean that the  bankruptcy and/or foreclosure is expunged:

  • It might be deleted off credit report but the fact still remains that consumer did file bankruptcy and/or had a foreclosure and those records are still part of public records
  • Mortgage Applicants do not have to worry about other derogatory items being removed from credit report such as the following:
    • Collection accounts
    • Charge offs, late payments
    • Other derogatory items

This is because the mortgage application does not ask applicants nor does the application ask whether the applicant had any derogatory items removed.

Credit Repair During Mortgage Process

Credit Repair During Mortgage Process

Hiring a credit repair company and getting derogatory items deleted off credit report is totally legal.

  • Nothing against the law in getting their bankruptcy and/or foreclosure removed off credit report due to inaccurate information but it is illegal lying about it on their mortgage application

Qualifying For Mortgage After Bankruptcy And Foreclosure are possible for all hard-working Americans. Home Buyers interested in qualifying for Mortgage After Bankruptcy And Foreclosure can contact us at Gustan Cho Associates at 1-262-716-8151 or text us for faster response. Or email us at gcho@loancabin.com. We are direct lenders with no overlays on government and conventional loans and licensed in multiple states. We are available 7 days a week, evenings, weekends, and holidays to help. Borrowers can also email us at gcho@loancabin.com. Gustan Cho Associates can help home buyers qualifying for a mortgage after bankruptcy and foreclosure with no waiting period with our new NON-QM Loan Programs launched last year. No waiting period for qualifying for a mortgage after bankruptcy and foreclosure.

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