topic Re: When do waiting periods begin for Ch 13 + foreclosure for conventional/jumbo loans? in Mortgage Loans

When do waiting periods begin for Ch 13 + foreclosure for conventional/jumbo loans?

hd_apk — Wed, 14 Jul 2021 23:36:54 GMT

I filed Ch 13 5 year plan in 2016, and am now debt free waiting on discharge which should be later this year. As part of the BQ I surrendered a USDA mortgage/house that had been in default since 2010, but only foreclosed on in 2017 after I filed the Ch 13. The foreclosure does not show up on my credit reports, but the Ch 13 shows filed in 2016.

My spouses credit is exceptional, but I make 80% of the family income. We're looking for loan options beyond FHA, between conventional and jumbo.

Thanks!

Re: When do waiting periods begin for Ch 13 + foreclosure for conventional/jumbo loans?

Mortgage-Specialist — Thu, 15 Jul 2021 01:23:00 GMT

I'm not so sure you'd have many options besides FHA based on foreclosure and BK. Foreclosure will still show up even if it's not showing on credit. Hopefully you won't have a CAIVERS issue when going FHA. Because you mentioned Jumbo, please know that FHA has maximum loan limits based on the county

Re: When do waiting periods begin for Ch 13 + foreclosure for conventional/jumbo loans?

hd_apk — Thu, 15 Jul 2021 02:28:27 GMT

Mortgage went into default in 2010, everything I've read said that is when waiting period begins. Most resources online say 7 years after filing chapter 13 for conventional loans. But speaking with Chase today they could not confirm.

Re: When do waiting periods begin for Ch 13 + foreclosure for conventional/jumbo loans?

arealswellgirl — Thu, 15 Jul 2021 04:17:20 GMT

From Fannie's site:

(source: https://selling-guide.fanniemae.com/Selling-Guide/Origination-thru-Closing/Subpart-B3-Underwriting-Borrowers/Chapter-B3-5-Credit-Assessment/Section-B3-5-3-Traditional-Credit-History/1032994681/B3-5-3-07-Significant-Derogatory-Credit-Events-Waiting-Periods-and-Re-establishing-Credit-08-07-2019.htm)

Bankruptcy Chapter 13

"A distinction is made between Chapter 13 bankruptcies that were discharged and those that were dismissed. The waiting period required for Chapter 13 bankruptcy actions is measured as follows:

two years from the discharge date, or
four years from the dismissal date.

The shorter waiting period based on the discharge date recognizes that borrowers have already met a portion of the waiting period within the time needed for the successful completion of a Chapter 13 plan and subsequent discharge. A borrower who was unable to complete the Chapter 13 plan and received a dismissal will be held to a four-year waiting period."

Foreclosure and Bankruptcy on the Same Mortgage

"If a mortgage debt was discharged through a bankruptcy, the bankruptcy waiting periods may be applied if the lender obtains the appropriate documentation to verify that the mortgage obligation was discharged in the bankruptcy. Otherwise, the greater of the applicable bankruptcy or foreclosure waiting periods must be applied."

Freddie seems to have the same waiting periods (source: https://guide.freddiemac.com/app/guide/section/5202.5).

I'm not a professional mortgage person in the least, but I did have to do a lot of research when I had a bk7 before the 4 year conventional waiting period. I ended up having to go FHA which has a 2 year waiting period and then just refinanced as soon as I could. Like someone else said, FHA has limits depending on your county for jumbos. If you reallllly need to have a mortgage now, I would research non-QM mortgages which you can qualify with just bank statements and generally require a larger down payment. If you don't want to go that route, I don't think you have any options since you haven't been discharged yet (afaik).

Re: When do waiting periods begin for Ch 13 + foreclosure for conventional/jumbo loans?

tooleman694 — Thu, 15 Jul 2021 18:34:29 GMT

2024 before you can go conventional. FHA is probably the only option.

Re: When do waiting periods begin for Ch 13 + foreclosure for conventional/jumbo loans?

VALoanMaster — Thu, 15 Jul 2021 20:51:58 GMT

@hd_apk wrote:
Mortgage went into default in 2010, everything I've read said that is when waiting period begins. Most resources online say 7 years after filing chapter 13 for conventional loans. But speaking with Chase today they could not confirm.

That is absolutely not true for any traditional (FHA, VA, USDA or conventional) mortgage options.

Jumbo loans have even tougher guidelines than conventional loans when it comes wait times after a major derogatory credit event.

You can go FHA right now or conventional in 2 years.

The other option would be a non qm loan which will require more money down and higher rates.

Re: When do waiting periods begin for Ch 13 + foreclosure for conventional/jumbo loans?

hd_apk — Thu, 15 Jul 2021 22:19:22 GMT

@VALoanMaster wrote:
@hd_apk wrote:
Mortgage went into default in 2010, everything I've read said that is when waiting period begins. Most resources online say 7 years after filing chapter 13 for conventional loans. But speaking with Chase today they could not confirm.
That is absolutely not true for any traditional (FHA, VA, USDA or conventional) mortgage options.
Jumbo loans have even tougher guidelines than conventional loans when it comes wait times after a major derogatory credit event.

You can go FHA right now or conventional in 2 years.
The other option would be a non qm loan which will require more money down and higher rates.

Which event are you referring to, the foreclosure or the BQ?

I'm reading that foreclosure has a period of 7 years starting with the first missed payment that lead to the forclosure.

I'm also seeing Ch 13 requires a 2 year period after discharge, which would be 7 years post filing for a 5 year plan.

Re: When do waiting periods begin for Ch 13 + foreclosure for conventional/jumbo loans?

VALoanMaster — Mon, 19 Jul 2021 16:06:19 GMT

@Which event are you referring to, the foreclosure or the BQ?
I'm reading that foreclosure has a period of 7 years starting with the first missed payment that lead to the forclosure.
I'm also seeing Ch 13 requires a 2 year period after discharge, which would be 7 years post filing for a 5 year plan.

I think there maybe some confusion here.

If you're talking about how long a foreclosure can stay on your credit, it's a little over 7 years from your last payment.

If you're talking about qualifying for a new loan, the seasoning requirement is measured from when title is transferred out of your name.

Fannie Mae requires a 2 year wait after a ch 13 discharge.

Foreclosure and Bankruptcy on the Same Mortgage