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Filed for bankruptcy? Need a new home? You may be eligible to finance a new home.

Each lender or mortgage insurance company has rules governing financing after a bankruptcy. These rules change regularly so never assume “no” one day or with one lender will be the same another day.

According to an article in the New York Times, many individuals who filed for bankruptcy protection more than four years ago may now be eligible to apply for a mortgage.  According to Fannie Mae or the Federal Housing Administration the mandatory waiting periods to apply for a mortgage two to four years after the bankruptcy is discharged.  Individuals who filed for Chapter 7 bankruptcy must wait four years from the date of discharge (when their debts are wiped out) before applying for a conventional loan. The waiting period, according to Fannie Mae guidelines, is two years from discharge for Chapter 13 bankruptcies, in which debts are partially repaid under a court-approved plan.

Once you file for bankruptcy many mortgage companies, like Wells Fargo, will refuse to report your timely payments. These same lenders refuse to refinance your mortgage without first obtaining a bankruptcy court order called a reaffirmation agreement.

This just shows the lender’s lack of understanding how the law works for refinanced debts. There is nothing you can do except go to different lender for the refinance.

You need to keep in mind that federal guidelines change often, as to conventional.  Each lender may have different policies.  The moral – do you homework.  Warning – your credit score is affected each time you apply for new credit.  Therefore, apply for credit very sparingly.  Check out the Federal Trade Commission’s web site for consumers.

Rebuilding your credit should be done very carefully.  Make your current secured payments (house, car, furniture, etc) on time.  Once you file for bankruptcy many mortgage companies, like Wells Fargo, will refuse to report your timely payments.   These same lenders refuse to refinance your mortgage without first obtaining a bankruptcy court order called a “reaffirmation agreement”.   Some states, like Arizona, have a policy of not reaffirming home mortgages because Arizona has anti-deficiency protection for homeowners.  This just shows the lender’s lack of understanding how the law works for refinanced debts.  There is nothing you can do except go to different lender for the refinance.

I realize that you are working very hard to get your life back on track.  Learn to “use credit, rather than credit using you”.  Do not fall into any bad habits like buying on credit unless you are financing a house or car.