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Hi Everyone,
I've been a long time stalker on these boards, but this is my first post. I've learned a lot here over the past 2+ years, but now I finally have a question/issue of my own.
My wife and I filed for Chapter 7 BK in 2005 due to a financial hardship after our daughter was born. Our BK was discharged in Jan 2007. We have since rebuilt our credit thanks to this forum and have established a perfect payment history. Well, we have finally found our dream house and have begun the mortgage process w/ USDA. We have received approval from the lender (Chase), but have hit a hiccup w/ USDA. USDA guidelines are 3 years clear from a BK and our BK will be slightly under 3 years (2 years, 9 months) when we reach our requested closing date of 10/30/09. Can anyone (Shane or any others in the know) please let me know what my chances are of getting an exception for this? We are supposed to get a final answer on Monday, but any feedback prior to then would certainly be appreciated. Our pertinent info is below.
- Income is 83K (76 when daycare expenses are deducted), so we're at the top of the income limit.
- DTI w/ proposed mortgage included would be approx 36%
- Low mid Fico score is 632 (actually higher since paying off a lot of CC's. More like 650 now), but that's what was sent to USDA.
- No lates or anything negative whatsoever since BK was discharged.
- We have 2 auto loans, a personal loan and a total of 8 CC's since our BK between the 2 of us. All CC's are currently below 20% util.
Our broker is optimistic, but again, I would love to hear any feedback or experiences that any of you may have.
Thanks!
We closed in June. BK7 discharged 4/07 plus foreclosure less than 2 years. (Foreclosure was filed when we filed BK, but took forever before it was completed.)
Mid-score at the time was around 680. Perfect credit post BK.
@Anonymous wrote:We closed in June. BK7 discharged 4/07 plus foreclosure less than 2 years. (Foreclosure was filed when we filed BK, but took forever before it was completed.)
Mid-score at the time was around 680. Perfect credit post BK.
Thanks! We seem to be in the same boat, except I'm farther out from my BK than you were, so hopefully that bodes even better for my chances. I should find out today. Thanks for the feedback.
Here's the response that we got from USDA.
With credit scores over 620, in order for a lender to approve and issue a credit waiver, lenders must secure documentation evidencing the circumstances surrounding the adverse information was temporary in nature, AND was beyond the applicant's control, AND has been removed so their reoccurrence is unlikely. This documentation must be included when the file is submitted for review. There could be NO other risk layering (ratios must be 29/41, no payment shock, etc) Additional information submitted must not adversely affect the eligibility requirements of the application.
In other words, they won't commit without a full submission of the app, which we did yesterday. The lender (Chase) has already approved it, so hopefully USDA will also. We meet all of the criteria, so I don't see an issue. That doesn't mean that I'm sleeping any better though!