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Options for refinancing 1st, and 2nd mortgage !!!!!

Discussion in 'Refinance' started by albert810, Jan 19, 2013.

  1. albert810

    albert810 LoanSafe Member

    First Mortgage $189,000 MGC Mortgage Interest Only

    Second Mortgage $50,000 First Bank And Trust Interest Only

    Estimated Home Value $240,000 Low End $260,000 High End

    Now a little about myself, I received a chapter 7 bankruptcy discharge 2 years ago to eliminate some credit card debt, at the time of the discharge neither loan was reaffirmed, as my lawyer stated it would not make sense to do that. Prior to my BK, I was never late on any of my payments both the first, and second, and have continued to be on time, until this date. Since my BK my credit has been on the up it os now at 660, and keeps improving every month.

    What I want to do is refinance both the 1st, and 2nd mortgage into 1 payment, and take advantage of the low interest rates.

    What are my best options at getting this done??

    Are there any government programs that fit my situation?

    I will be checking this post often, so if you need any further information from me, please let me know.

    Thanks
  2. rookie

    rookie LoanSafe Member

    What was the reason for the BK? Was it to much cc debt? Loss of income? Do you have stable employment? I would think you would be a good candidate for a refinance since your not underwater. My only question is will the BK hurt you or not? 660 score is not to bad. You will pay a higher rate however.
  3. albert810

    albert810 LoanSafe Member

    My BK was to eliminate $40,000 of CC bebt. I have been at the same company for 2.5 years
  4. Evan Bedard

    Evan Bedard Call 1-800-779-4547 Loan Safe Mortgage

    You may want to contact some local agents to discuses your situation because a refinance may not be possible if the discharge was two years ago. From my understanding Chapter 7 bankruptcies require a 4-year time period re-establishing credit from discharge of bankruptcy before you will be eligible for a refinance..
  5. Erik Sandstrom

    Erik Sandstrom Mortgage Expert - Call 1-800-779-4547

    Hi Albert810,
    Welcome to LoanSafe, you found a very valuable resource to answer all your mortgage related questions. Everyone here is always happy to help!

    Here is what I have gathered regarding your scenario and options you may have:

    Property Value: $250,000.00 (Meeting you in the middle)
    1st Mortgage - 189,000.00 (LTV = 75%)
    2nd Mortgage - 50,000.00 (CLTV = 95.6%)
    Bankruptcy discharge 2 years ago - home not re affirmed in the bankruptcy

    The largest hurdle I can see is that the home was not reaffirmed in the bankruptcy which basically means you no longer have an ownership interest in the property. The mortgage payments you're making right now can be looked at similar to rent. This is my understanding and after speaking with a few bankruptcy attorneys they tell me that you would have to re-open the bankruptcy and complete a re-affirmation of your home. I have been told by BK attorneys that it's almost impossible to re-open a bankruptcy that has already been discharged, but that would be the first step.

    If your loan happens to be backed by Fannie Mae or Freddie Mac I have heard of borrowers being able to refinance under the HARP Same Servicer program. It seems to be a 50/50, I've had borrowers be succesful and others not. The reason I don't have more exact numbers is the Mortgage Bank that I work for does not participate in the "Same Servicer" program as we were not retaining the servicing of loans prior to May 31st, 2009 (deadline for HARP).

    If there's a way for you to re-affirm the home you may have a couple options, I have included some bankruptcy timelines below:

    FHA - Goes up to 96.5% LTV and a Chapter 7 BK requires a 2 year seasoning before financing is made available.
    Conventional - Max 95% LTV and CH7 BK has 4 year seasoning period
    VA - Must be a veteran or active duty, Max LTV 100%, BK has 2 year seasoning

    I would reach out to your BK attorney and find out what he thinks, worst case scenario maybe you would qualify to purchase a new property?

    Hope this helps, anytime you have a question feel free to let me know.

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