Ch 7 Bankruptcy

Jeff · Joined: 16 Jun 2007 Posts: 9

I have a customer that has a Ch 7 Bankruptcy.. file date was August 05 (thus over 2 years). Discharge date was Feb 06 (thus still a few months until 2 yr mark).

750+ credit score
perfect mtg and credit history since bankruptcy discharge.
35% DTI
97% financing needed if escrows mandatory
95% financing if escrows not mandatory.
$140k loan amount
has perfect tradelines and reserves.

My sense is I cannot get a an automated approval, nor can I recommend FHA since they go by discharge date. Does anyone know any lender that will do a manual U/W or even any subprime lenders where I would be able to get a rate below 8%? Or is his only option waiting for 4 more months... which he really doesn't want to do as he's been waiting for 4 months already

Thanks

Haplo · Joined: 20 Jan 2005 Posts: 2422 Location: Springfield, IL

Depending on the reason for the bankruptcy, check into the options on FHA. If he's got a 750 score chances are good that he had fantastic credit prior to and after, and simply went into the bankruptcy as a means to deal with some specific situation.

Most of the under 2 year BK that I've gotten through at Wells has been for medical reasons, or I also had one that was due to a massive theft from their business. This is all on the retail side though, and I'm not sure about the wholesale side.

Boris · Joined: 13 Aug 2007 Posts: 29 Location: Minneapolis, MN

Yeah if its for medical reason and you got a good explanation to go with good credit and can do manual underwrite on the FHA loan that is what you want for your client. If not possible for some reason I would explain the situation to the client and have them wait till february so that you can get them good deal and make money instead of getting them bad deal now and/or work for free.

ken(TX) · Joined: 23 Sep 2005 Posts: 184 Location: Dallas, TX

Bank of America's Community Accommodation would accept the credit history if their income is at or below 80% of the area median income OR the property is located in a low or moderate income census tract. Program is available to brokers.