Mortgage after bk7

Wecandoit

LoanSafe Member
Jan 17, 2019
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0
0
Hi Erik,

I emailed you this as well. We are looking to buy a new house within the year. We can finally sell ours since we now have equity and we need more space.

We filed bk7 in 4/14 and it was discharged 5/14. We do not have a late pmt on our CR since BK. Ordered the 3b credit reports for hubby and I and I see that our lowest middle mortgage score is mine and it is currently 653. We have high utilization but just paid it down a ton. Looking to have 0 cc debt within the next month or so (I will let a small amt report after that).

We did not reaffirm our mortgage but have paid to stay. Prior to bk we had 0 late payments. I did have a few lates (30 days, never 60) recently on the mortgage that did not report, of course, but will be in my previous 12 month history. No excuse really but my dad got very sick and died and I just sort of let it go a little late. Since it doesn’t report and my company doesn’t charge a late fee, I truly didn’t see any major harm.

Will all lenders order a verification of mortgage to see this payment history? If so, do they only go back 12 months?

We could wait a few months if that is the case, but I was hoping to jump the gun sooner than later before rates continue to rise.

We have a combined monthly gross income of about 18k. We will only have 2 car payments of 900 total/month and will have about 100k to put down on our new home. What debts count towards dti? We will have 0 credit card debt within the next month.

Thanks so much in advance.
 

Erik Sandstrom

Mortgage Expert - Call 1-619-379-8999
Staff member
Loan Safe Mortgage
Jan 14, 2011
2,060
162
63
San Diego, California
www.loansreduced.com
Hi Wecandoit,
Sorry I didn't notice this sooner and hopefully I responded via e-mail. I had a couple issues while I was out of the office this past week with my e-mail.

In regards to the seasoning on the BK, that's exactly what we are looking for. The only issue is the payment history, we will want to see a payment history and depending on the program will determine the guidelines. FHA will allow a certain number of 30 day lates (I believe 3 in the past 12 months)...conventional is a bit more strict but I can review the guidelines and let you know.

To answer your question regarding payment history, yes we will order that if you still retain the property. I do have portfolio programs as well that don't care about payment history as long as you're current now.

Debts that count towards DTI would be your current residence if you are planning on retaining (or if renting we can use rental income to offset the liability, as well as any items that show up on your credit report. Car payments less than 10 months remaining (as long as they are not a lease) we can exclude from your debt ratio but it sounds like it's quite healthy based on what you've mentioned above.

If you want, I can knock out a pre-approval for you this weekend. Here's my website to apply online directly: www.LoansReduced.com but please also text/or call at 619-379-8999.
 

Erik Sandstrom

Mortgage Expert - Call 1-619-379-8999
Staff member
Loan Safe Mortgage
Jan 14, 2011
2,060
162
63
San Diego, California
www.loansreduced.com
Thanks Soap94!
On a side note, I have been able to get one of our LoanSafe members in a home where her current property had not yet foreclosed but she was pending foreclosure. I can see, in your case how that would be viewed but if you're planning on keeping the property - I'm assuming I will need to count the liability against you.

Here are the payment history requirements for Conventional and FHA:

Conventional payment history:

  • If any borrower’s credit report contains a mortgage tradeline that is 60 or more days past due when the account was last reported by the creditor and the account was reported within the 12 months prior to the credit report date, the loan casefile will receive a Refer with Caution recommendation and will be ineligible for delivery to Fannie Mae.
  • If an account is reported on the credit report as a non-mortgage tradeline, and yet the account is listed on the loan application as a mortgage, DU will analyze the credit history of the tradeline as a mortgage.
  • For example, if the credit report identifies an account as a revolving account, and the account is listed as a HELOC on the loan application, DU will evaluate the credit history of the account as a mortgage. Any late payments in the credit report will be treated by DU as delinquent mortgage payments.
  • If there is a mortgage that is disclosed on the loan application but not reported on the credit report, or the mortgage is on the credit report with an outstanding balance but the payment history has not been reported in the last six months, DU will issue a message requiring the lender to confirm that the account is not two or more payments past due as of the date of the application and that it has not been past due by two or more payments in the last 12 months. If the lender determines that the borrower does have a mortgage that is past due by two or more payments or has been past due by two or more payments in the last 12 months, then the loan casefile is not eligible for delivery to Fannie Mae.
  • Borrowers may not bring past-due mortgage accounts current prior to closing in order to circumvent Fannie Mae’s policy regarding past-due mortgages. However, the lender may apply some discretion with regard to the application of this policy if it determines and documents that the past-due account status was not the fault of the borrower—for example, if the servicer misapplied or lost the borrower’s payment.
  • Loan casefiles will receive an Ineligible recommendation due to excessive prior mortgage delinquency if the borrower has a mortgage tradeline on his or her credit report that has one or more 60-, 90-, 120-, or 150-day delinquency reported within the 12 months prior to the credit report date.
  • The above policies will apply to all mortgage tradelines, including first liens, second liens, home improvement loans, HELOCs, and mobile home loans.

FHA Payment History Requirements:

Housing Obligation/Mortgage Payment refers to the monthly payment due for rental or Properties owned. A Mortgage/housing obligation Payment is considered delinquent if not paid within the month due.

Late Mortgage Payments for Purchase and No Cash-Out Refinance

  • The file must be downgraded to a Refer and manually underwritten if any mortgage trade line, including mortgage line-of-credit payments, during the most recent 12 months reflects:
  • three or more late payments of greater than 30 Days;
  • one or more late payments of 60 Days plus one or more 30-Day late payments; or
  • One payment greater than 90 Days late.
  • A Mortgage that has been modified must utilize the payment history in accordance with the modification agreement for the time period of modification in determining late housing payments

Cash-Out Refinance Transactions
  • The file must be downgraded to a Refer and manually underwritten if any mortgage trade line, including mortgage line-of-credit payments, reflects:
  • current delinquency; or
  • Any delinquency within 12 months of the case number assignment date.
  • A Mortgage that has been modified must utilize the payment history in accordance with the modification agreement for the time period of modification in determining late housing payments.