Financing in 78759>Question Details

Scott Butcher, Real Estate Pro in Austin, TX

Homeowner having both a Chapter 7 Bankruptcy & Foreclosure history

Asked by Scott Butcher, Austin, TX Tue Apr 19, 2011

If a homeowner enters into a Chapter 7 Bankruptcy PRIOR to his home going into Foreclosure by a 1st & 2nd lien lender, does the homeowner have to satisfy either the 2 year waiting period for Chapter 7 Bankruptcy OR the 3 year waiting period for a Foreclosure to become eligible again for FHA financing, even if the Chapter 7 BK fiiling was prior to the foreclousure event?

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The short answer is (3) years after the Trustee's Sale Date not the bankrucpty discharge date. Most lenders get that wrong. Unless your client is a Veteran, VA allows a borrower to purchase another home 24 months after the Trustee Sale.

For a more detailed answer, please read my blog at:

http://www.trulia.com/blog/george_raymondo/2011/03/can_someo…

This should give you the answer you seek.

Best of Luck!
Web Reference: http://www.AFN-Loans.com
1 vote Thank Flag Link Tue Apr 19, 2011
There is a new FHA program that allows to you to finance a home one year out of bankruptcy. You must have lost a job in the last 5 years and the BK must be due to job loss. Give me a call to discuss 972-854-3270.
0 votes Thank Flag Link Tue Dec 17, 2013
Please see the following article regarding updates on Bankruptcy Rules and Programs which allow for a new loan 12 months after discharge date.

Bankruptcy rules have recently changed according to The U.S. Department of Housing and Urban Development.

HUD recently announced a change to the Bankruptcy Rules for FHA loans! The “Back to Work – Extenuating Circumstances” program. Aimed to help people who have lost their home through foreclosure, short sale or bankruptcy. HUD has changed the bankruptcy rules that previously required minimum of 24 months, to 12 months.bankruptcy rules, buy a home after bankruptcy, how long after bankruptcy, fha bankruptcy guidelines

Bankruptcy Rules and the Minimum Eligibility Requirements:

To qualify, the borrower must meet several minimum eligibility requirements. The borrower must have experienced an “economic event,” which is any occurrence beyond the borrower’s control that resulted in a loss of employment, loss of income or a combination of both that caused a reduction in the borrower’s household income by 20% or greater that lasted at least six months or longer. The borrower must have recovered from the “economic event” with the re-establishment of satisfactory credit for a minimum of 12 months and the borrower must attend housing counseling from an approved HUD Housing Counseling Agency.

Second Chance Product Highlights:

· Previous bankruptcy, foreclosures and short-sales are acceptable.

· No longer need to wait three years after a previous foreclosure or two years after a bankruptcy to obtain affordable financing. The minimum is now 12 months.

· Only a 3.5% down payment is required (minimum credit score of 580 required for maximum financing).

· No income restrictions.

· Gift funds permitted.

· Single-family maximum loan amount of $729,750 in high-cost living areas.

· First-time homebuyers are acceptable.
0 votes Thank Flag Link Mon Sep 9, 2013
Thanks for this I never knew what a Utah, chapter 7 bankruptcy was.
0 votes Thank Flag Link Mon Sep 9, 2013
General rule is 2-3 years depending on the type of loan you sold short on before an institutional lender will consider you for a new mortgage provided you meet their other requirements.



Check if you qualify for a mortgage. Try http://www.whywaitbuytoday.com
0 votes Thank Flag Link Sun Aug 18, 2013
They foreclosed...... 3yrs for FHA.

Had they paid the mortgage on time OUTSIDE of the bk then the 2yr waiting for bk would only apply.

Remember.... they didn't pay their mortgage on time.

3yrs is pretty gracious.
0 votes Thank Flag Link Sat Jun 29, 2013
I had a buyer that wanted to buy a home in Arizona, but he had a Chapter 7 bankruptcy 7 months ago. After researching the web I found a loan program at http://www.cfsflex.com, they allow a mortgage after a foreclosure, short sale, or bankruptcy. There is only a six month waiting period. Good to see lending options coming back.
0 votes Thank Flag Link Sat Jun 29, 2013
Scott:

If there is a foreclosure either before or after BK they have to wait 3 years from foreclosure date..
0 votes Thank Flag Link Wed Apr 20, 2011
Sounds like a reasonable question for our times, Scott. I would have to defer to the other mortgages broker like Tom Burris or George Raymondo for the answer since that situation has not yet crossed my plate. And thanks for posting it - it's certainly something I can stand to learn.
Best regards here in Austin! Monroe
0 votes Thank Flag Link Wed Apr 20, 2011
They didn't pay their mortgage....

3yrs
0 votes Thank Flag Link Tue Apr 19, 2011
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