Home Included in Bankruptcy and the Bank didn't Foreclose right away

[Erik Sandstrom]

Hi MegKell,
I should have revised this post when I was able to overcome a situation like yours. What I did to overcome it was have their attorney write on the attorney letterhead that the statement of intention is simply the intention at the time, not necessarily what the outcome of the bankruptcy was. If the intention changed throughout the bankruptcy proceedings and the property was included in the bankruptcy that can definitely change the outcome of being able to obtain an approval. Without written correspondence from the actual attorney that filed the bankruptcy it might end up being a difficult battle.

I can absolutely look into your scenario if you would like for pre-approval. My best contact information is 619-379-8999 and [email protected]

 

[MegKell]

Hi MegKell,
I should have revised this post when I was able to overcome a situation like yours. What I did to overcome it was have their attorney write on the attorney letterhead that the statement of intention is simply the intention at the time, not necessarily what the outcome of the bankruptcy was. If the intention changed throughout the bankruptcy proceedings and the property was included in the bankruptcy that can definitely change the outcome of being able to obtain an approval. Without written correspondence from the actual attorney that filed the bankruptcy it might end up being a difficult battle.

I can absolutely look into your scenario if you would like for pre-approval. My best contact information is 619-379-8999 and [email protected]

Thank you for responding so quickly! I definitely can get a letter from my BK lawyer stating what you indicated above, I don't see that being a problem. I will contact my lawyer right away.

I am currently working with a mortgage company right now...but if it doesn't work out and they cant underwrite the loan for me I will be in contact with you for sure. Thanks for your help!

 

[Erik Sandstrom]

Update to this thread: I have encountered a few situations where borrowers reached out to me regarding their home included in bankruptcy and I wanted to take the time to update everyone that comes across this thread.

If you included your home in bankruptcy and remained in the home without making a mortgage payment until they foreclosed that may be looked at as a strategic default and therefore you would not be eligible. I had a borrower recently reach out to me with this exact scenario and the underwriter noticed that they filed their tax returns at the prior residence all the way up until last year when they ultimately were forced to leave the property. This file was denied due to the fact that they could have been making the mortgage payment and took advantage of the system by remaining in the home.

Another situation was where a borrower had a very large 401K that they were using towards down payment on the new loan. We ultimately determined that the borrower could have remained current on the home after losing their job by taking out a loan against their 401K.

Please don't let the above deter you from submitting an application to see if you qualify. If you don't fit into the guidelines of this program we have a large suite of portfolio options available starting at 20% down the day after foreclosure.

 

[Alicekei]

I included a mortgage in my bankruptcy in August 2015, bank did not transfer the deed until Feb 2017. It came up before underwriting, bankruptcy plan specifically states property was surrendered in chapter 13 in August 2015. Will underwriting honor my bankruptcy date?

 

[Jzone]

I included a mortgage in my bankruptcy in August 2015, bank did not transfer the deed until Feb 2017. It came up before underwriting, bankruptcy plan specifically states property was surrendered in chapter 13 in August 2015. Will underwriting honor my bankruptcy date?

I would think the underwriter would use your bankruptcy date of discharge.

 

[Erik Sandstrom]

Yes, and if they don't - give me a call at 619-379-8999 or [email protected] and I would be happy to help you.

 

[Laurie Brown]

My home was included in bankruptcy, which was discharged in 2009, but home not foreclose d on until 2017, and was declined for the in 2019, be sure foreclosure showed up in public record when sent to underwriter. Will I be able to qualify for fha, and or conventional mortgage this year with credit score of 686, and at least 20% down?

 

[Erik Sandstrom]

Hi Laurie,
I can do a Conventional refinance for you now with only 5% down, please give me a call - 619-379-8999 or shoot me an e-mail here: [email protected]. Technically you should have qualified in 2019 but this guideline isn't very well understood by many of the loan officers (and even underwriters) in the industry.