I have a few questions about the FHA process. We just received our Chapter 13 discharged on July 28th, 2008 and met with a moratage broker August 1st, 2008. Credit scores were TU 642 and EQ 635 no score for EX don't why though. We brought in everything she asked for, our W2's credit report, discharge papers,and pay stubs for one month. From which she said we our pre approved for FHA, now I no this different from prequailfied. We are looking at getting an FHA 203K for $230,000 the ltv is at 62% the home is on 7 acres. My concern is we haven't established any new credit since the BK . We did have an auto loan that was outside of BK it was paid off about 2yrs before our disharge. She told us the loan shouldn't be a problem as long as we have the 3% down and closing costs in the bank before we have a closing date. This all seems like it would be a little to easy. I'm just wondering if what she is telling us is possible. From what I've read here on the forums FHA needs a lot of stuff and they look at everything and anything. I have also read that you need to be 2yrs discharged out of chapter 13. Is my broker for real? Just really stressed out the process.
Any help and insight would greatly be appriecated.
A chapter 7 does require a 2 year waiting period after discharge.
A chapter 13 does NOT. You can receive an FHA mortgage immediately after discharge with reestablished credit and decent scores. This is because you have been in bk for at least 36 months from the file date of that BK.
FHA does approve mortgages for a chapter 13 bk even if you are NOT discharged yet as long as you have trustee permission and have made on time payments for 12 months or more to the trustee.
FHA will consider appoving a borrower who is still paying on a Chapter 13 Bankruptcy if those payments have been satisfactorily made and verified for a period of one year. The court trustee's written approval will also be needed in order to proceed with the loan. The borrower will have to give a full explanation of the bankruptcy with the loan application and must also have re-established good credit, qualify financially and have good job stability.
We filed chapter 13 in 2003 under the old rules, it was the full 60 months of payments. She told us, she would contact the Trustee for the final report showing everything was paid in the discharge. Since we haven't received that yet from the court only the discharge. Also advised us to contact our attorney and let them know we were applying for a mortgage so they could contact the Trustee also. We our really confused because we looked at the FHA/HUD website. It says 2yrs after CH 7 and if your in CH 13 you need to be in one yr with the Trustee approval, but it discharged 2yrs out . Which seems odd you get FHA while in CH13 but have to wait if just out.
The latest thing she wants us to do now is put in a contract for the house and set an estimated closing date so she get the ball rolling. We have never purchased a home before so we have no idea how this process works. Along with the CH13 discharge it's even more confusing to us. You can find all the infoin the world to purchase with good credit but hardly anything about doing it with the CH13 discharged.
you know many people do NOT understand how a chapter 13 bankruptcy works. You are discharged. Your case is closed. You are free to do whatever you want now and with your creditor matrix and discharge in hand that is all you should need to show to anyone. The trustee is done with your case and he will go "what" when contacted. The same with your attorney.
Chapter 13 – A Chapter 13 Bankruptcy may be considered for loan approval upon discharge with documentation to evaluate the applicant’s overall financial strength and established credit
I got the above statement right from the FHA guidelines.
Message Edited by granny031350 on 08-04-200801:19 PM