10-24-2012 03:29 AM
Oh. For some reason I thought I read it was 2 years on a BK for FHA. Maybe it's just the lenders that want to see 3 years? Thanks for all of the advice. I'm really just hoping the bigger collection isn't an issue since we're making payments on it.
Sorry, you are correct. 4551.1 allows for FHA 2 years post Chapter 7. These are the relevant sections of 4551.1
A Chapter 7 bankruptcy (liquidation) does not disqualify a borrower from
obtaining an FHA-insured mortgage if at least two years have elapsed since
the date of the discharge of the bankruptcy. During this time, the borrower
· re-established good credit, or
· chosen not to incur new credit obligations.
An elapsed period of less than two years, but not less than 12 months, may be
acceptable for an FHA-insured mortgage, if the borrower
· can show that the bankruptcy was caused by extenuating circumstances
beyond his/her control, and
· has since exhibited a documented ability to manage his/her financial affairs
in a responsible manner.
Note: The lender must document that the borrower’s current situation
indicates that the events which led to the bankruptcy are not likely to recur.
A Chapter 13 bankruptcy does not disqualify a borrower from obtaining an
FHA-insured mortgage, provided that the lender documents that
· one year of the pay-out period under the bankruptcy has elapsed
· the borrower’s payment performance has been satisfactory and all required
payments have been made on time, and
· the borrower has received written permission from bankruptcy court to enter
into the mortgage transaction.
TOTAL Scorecard Accept/Approve Recommendation
Lender documentation must show two years from the discharge date of a
Chapter 13 bankruptcy. If the Chapter 13 bankruptcy has not been discharged
for a minimum period of two years, the loan must be downgraded to a Refer
and evaluated by a Direct Endorsement (DE) underwriter.
According to this... you incurred new debt post BK that was then sent to collections. I don't think this will be viewed positively by the lender as in meeting the above requirements
I know that no one can say for sure, but if we are able to have the small medical collections removed do you think it will help this aspect? Then we would just have the timeshare collection that we're making payments on and the tax lien. I have no idea how to get rid of the tax lien or I would get rid of that too. And it's weird because it only shows up on one of our credit reports. We have made on-time payments on our credit cards and car loans since BK so I'm hopeful that we would be looked upon favorably for that. Thanks for everyone's help!