How soon can I get a mortgage after discharged from Bankruptcy Chapter 13 which included a home we surrendered? Interested in FHA or FM Homepath.

Asked by Kay, Nashville, TN Tue Dec 10, 2013

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Jim Simms, Mortgage Broker Or Lender, Louisville, KY
Wed Dec 11, 2013
I disagree with both of the answer so far; this question is a lot more complicated and doesn’t contain enough of the facts to answer specifically. If you are going to use an FHA loan it depends on when the next lender can you can get a CAVIRS number. That date depends on the type of mortgage you had on the home that went in default. There are two timelines to this question; the date will be the longer of the two. The first date is based on the BK the second on the disposition of the home or payment of loss if it was an FHA loan. Example, if you had an FHA loan on the last home and the lender filed a claim with FHA, the date they paid the claim to the lender is the start date of the second timeline.
Here is a couple of paragraphs from the guidelines regarding the surrender of the last home:

A borrower is generally not eligible for a new FHA-insured mortgage if, during the previous three years:

his/her previous principal residence or other real property was foreclosed, or

he/she gave a deed-in-lieu of foreclosure.

Exception: The lender may grant an exception to the three-year requirement
if the foreclosure was the result of documented extenuating circumstances
that were beyond the control of the borrower, such as a serious illness or
death of a wage earner, and the borrower has re-established good credit since
the foreclosure.

Divorce is not considered an extenuating circumstance. An exception may,
however, be granted where a borrower’s loan was current at the time of
his/her divorce, the ex-spouse received the property, and the loan was later

Note: The inability to sell the property due to a job transfer or relocation to
another area does not qualify as an extenuating circumstance.

I hope this info is helpful, good luck,

Jim Simms
NMLS # 6395
Financing Kentucky One Home at a Time
I answer questions about financing real estate based on my decades of experience dealing with mortgage underwriters. This answer is my personal opinion, has not been reviewed or approved by the company I work for. I do not offer legal or tax advice, if you need answers from an attorney or CPA find one knowledgeable in your local market.
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1 vote
The loan on our last home was a conventional loan and the reason we filed bankruptcy was due to being upside down and the inability to sell the property when the market crashed and we were transfered/relocated out of state by our employer. When found a foreclosure house that we are interested in and it qualifies for a FM Homepath loan. Wondering when we would qualify for one of these loans.
Flag Wed Dec 11, 2013
James Deskins, Agent, Worthington, OH
Wed Dec 11, 2013
>>each lender will have different standards.

Actually, that's probably not true. FHA guidelines are the same everywhere as are Fannie Mae Homepath guidelines.
0 votes
James Deskins, Agent, Worthington, OH
Wed Dec 11, 2013
Jim is right. It's a minimum of (24) months if you only filed bankruptcy. However, it's (36) months to get an FHA loan if you have a default.
0 votes
So a default would include surrending our last home in our bankruptcy filing? And we would have to wait 36 months to get an FHA loan? Is there a 36 month wait to qualify for a Fannie Mae Homepath loan too? We found a foreclosure home that we are interested in and it qualifies for a Fannie Mae Homepath loan--that's why I'm asking. Thanks for replies.
Flag Wed Dec 11, 2013
Josh Barnett, Agent, Chandler, OK
Wed Dec 11, 2013
Great Question, discuss further with your local lender and check with more than one, each lender will have different standards.
0 votes
Ulama Binsad…, Home Buyer, Los Angeles, CA
Wed Dec 11, 2013
Just be patient and rent for a while. Get your finances in order and save up a decent 20% down payment so you won't end up in foreclosure and bankruptcy again. Try to learn from your mistakes and do your best not to repeat them by doing things smarter. Don't use an expensive FHA mortgage.
0 votes
The problem with renting is that we don't have deductions to save us from paying so much tax on our income ($175K+); that's why we want to get a mortgage ASAP to reduce our tax liability. We have the down payment ready we just need to find out when we can qualify for our next home loan. The reason we took bankruptcy was due to being upside down and the inability to sell the property when the market crashed due to a job transfer/relocation out of state.
Flag Wed Dec 11, 2013
James Deskins, Agent, Worthington, OH
Wed Dec 11, 2013
Not sure why Chris says 12 months but the rule has always been 24 months from the date of discharge. Maybe he knows something I don't.
0 votes
Ryan Smith, Agent, Murrieta, CA
Tue Dec 10, 2013
You can obtain an FHA loan during a Chapter 13 bankruptcy as long as you have made 12 months of satisfactory Chapter 13 plan payments, but you must have bankruptcy court approval to get the loan. In the case of either an FHA loan or a VA loan, you must provide an explanation of the bankruptcy.
0 votes
To clarify, we were discharged from Chpt 13 Bankrupct 12 months ago and are interested in obtaining a mortgage. Has enough time past for us to quality for a Fannie Mae Homepath loan?
Flag Tue Dec 10, 2013
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