I am so frustrated & exhausted over all this. We finally found an area & house that we can both agree on. That is an accompishment. We explained to the lender that we are in the middle of cleaning up our CR's. So far I have gotten my Equifax almost clear. Waiting on the others to come back. Also that anything on them we have all documentation legal or otherwise to show we owe nothing. We do show a BK 7 in 1995 (all the accounts for that comes off in 4 months.) A Buisness Bk 13 Dismissed in 12/99. Not sure if I could get that off the CR because it was a buisness & not personal. 2 positive CC accounts always paid off each month, opened for several years, excellent payment history. Been Clean for 2 1/2 years. No debt at all. Own 2 cars. Have a small savings account. We both have jobs that pay well & we have either been at or have been doing that type of work for years. This lender came back with needing 35% down & 10% interest. Never asked for any documents, nor did he care. Is there any lender out there that actually works with you? Let me know if they exist. Thanks for letting me vent. Becky
I used a broker....they already know the ins and outs of lenders (well, if they are a god broker) and they can help prevent wasted inquiries. Just look in the real estate section of the paper and find brokers...many will have 'bk ok' and 'bad credit' programs. My credit was awful when I bought my house (it was befoer I had a lot of the bad and mistake stuff removed). My terms were much better....although my rate was 10, my downpayment was only 5k on a 164,000.00 loan. Hope this helps. Shawn
Don't dispair Becky. Sounds to me like you have a pretty good chance at getting a home. BUT, you're definitely with the WRONG LENDER. Thank him/her for the time and run to a reputable broker or lender immediately. I think you may be dealing with a classic predatory lender. S/he is playing on the probability that you're so ashamed of your credit that you won't shop around or compare notes. http://www.wellsfargofinancial.com has a new divison for the credit impaired interested in a mortgage, and so does, http://www.countrywide.com. Also, both NanaC and Momof3 had great success with a broker so search on their names for that info. (I can't recall that website).
I contacted Full Spectrum which is a division of Countrywide yesterday and was told worst case 35% down and best case 25%. Are there really brokers out there that know of programs with less down with imperfect credit or creative financing? I keep hearing about these situations but am not finding any. I keep hearing the farther away from BK and more seasoned your credit since the BK is the better your chances are. Problem is the cost of a single family home averages $200,000 here. I am looking at no more than a $145,000 home. There are still some decent areas near me that are in that price range, but 2-3 years from now I am afraid that may not be the case.
Your rep is obviously not interested in making money. That's what B, C, and D loans are for. Full Spectrum (as previousley suggested - a div of countrywide) and http://www.indymacmortgage.com. Also visit http://www.naca.org. If they have an office in your area they have a program that may be helpful in your quest. Too many programs are out there for you not to be able to become an owner. You need a lender that knows how to package your deal. Keep working at it! Us home poor people, we will acheive ownership in the near future.
Dont feel bad Becky. I agree 100% with Hope. I went to Wells Fargo when I started looking for a mortgage in January 2001. The guy there was wonderful and didnt even flinch at my credit. I used someone else b/c of a deal with my builder, but you definitely sound like you are worthy of a mortgage. I would just say thanks but NO THANKS to the lender that you went to. Good Luck with that house.
Becky, I agree with Hope, tell that lender to stick it where the sun don't shine. Seriously, you may want to check out www.askme.com, and go under the real estate section under mortgages, you have to register for the site but it just takes a minute. Post your question and you will probably receive atleast 4-5 brokers eager to talk with you. I learned a ton from that site and those experts.
Thanks everyone for the encouraging words. I will contact your suggestions tomorrow. I have talked to other lenders all were brokers in this area. Explained the situation, even brought all the documents with. They tell me it will be no problem getting a decent interest rate & low down. Then they immediatley want to run the CR. Ok we agree & it comes back & there is one excuse after the other why we can not get low done decent interest. Even with all our documents. The CR's & scores are 'gospel according to lenders.' We are batteling between the two of us & the 3 CRA at least 60 true errors in our reports. Along with the crappy old credit. We have been through this with 3 other lenders in this area. Although they weren't as rotten as this guy was. They wanted 20% down (which we do not have) At 10-14% interest. For a nice house in a good neighborhood your looking at $175 - 200K. One told me if we got our credit reports cleared up & the scores higher we could get a 10% down with 9% interest. What a deal huh? Thanks again, Becky
Becky, you haven't told if you you had previously owned a house before (or within the last two-three years). If not, go fha (3% down) and try to get an 1 yr ARM(5.5% - 6%). We just bought our first house based only on my husbands credit (I moved here from Canada 2 1/2 years ago and don't have any existing American credit lines). Anyway, husbands equifax was 621 on the equifax report (600 on the merged). We went through Countrywide and got the fha mortgage 1 yr ARM @ 5.5%. We even got a downpayment from Ameridream (sellers "donates" 3 1/2% of the sale price back to Ameridream. This will save you on going through the "higher" interest rates that places like Wells Fargo will charge on "imperfect credit".
Yes, we have always owned our own homes. We sold the last one Nov., 2000. We tried to apply for an FHA. According to FHA guidelines we fit the mold, but we were turned down for that too by several lenders. They told us the BK 13 had to be out for 2 yrs. Now the FHA guidelines specifically say 1 yr for a dismissed 13. We could not get anyone to underwrite it. Reason #2 because our scores were below 600. Not much, but enough for them to use that to turn us down. We have heard it all. Low scores, stuff on CR's (who cares that 90% of it is errors), the BK's (dosen't matter that one is Almost 7 yrs & the other was strictly a buisness), Not enough for down payment, not out of BK 2 yrs..... I did talk to a local Countrywide, don't know if their the same as your talking about. He said they were the actual lending co. Anyway he told me the only way we could get a 'good loan' was to have a 680 score or higher. It seems eveyone I have talked with is credit report/score driven. The bad thing is that when we sold our house we leased a place in a different town to see if we liked the area. The lease is up in two months. I don't think they will renew it. So we really need to get something soon. We have animals so to find somewhere else to rent is a pain. Becky
NanaC does your broker do buisness in the state of Fl? Would appreciate his name if he does Thanks, Becky
The best thing to do is email him yourself and ask. I was in CO and he got us settled in TX so maybe he handles many states. His name is Don Semler and you can email him and don@aimloans.com. Please tell him NanaC at creditnet sent ya! Good luck!
Becky, I feel for you and understand completely what you are going through. We are leasing an apartment now with two dogs. We would like to at least rent a house by the time the lease is up and better yet do a rent to own. This way if we find something we like and would like to own by the time we would exercise our option, the credit and downpayment situation would be better. At least I think I will get the option to renew my lease. Mine expires in March and we have to give a 60 day notice if we decide not to renew. Meaning we need to have something in mind by the end of December. I am running into the same thing as you. I might just e-mail Don also and see what he says. Another thing to consider and ask lenders is if they require any reserves. I had one lender tell me 20% down, a high interest rate, and something like 3 months reserve, and prove in a savings account that we have six months worth of mortgage payments saved. What a joke! If you hear something encouraging, let us know and I will do the same. Sorry I can't be of any help, unfortunately I keep running into the same mess you are.
Get the horse, then the cart Why are you looking for houses before correcting your reports and scores? You said, "A Buisness Bk 13 Dismissed in 12/99." Chapter 13 refers to personal bankruptcy, not business. Don't you mean Chapter 11? Don't you mean discharged? You said, "Now the FHA guidelines specifically say 1 yr for a dismissed 13." No, they don't. The guidelines say, "A borrower paying off debts under Chapter 13 of the Bankruptcy Act may also qualify if one year of the pay-out period has elapsed and performance has been satisfactory, and the borrower also receives court approval to enter into the mortgage transaction." That's far different than a dismissal or discharge.
Re: Get the horse, then the cart Quoted from nolo.com: "A business, even a sole proprietorship, cannot file for Chapter 13 bankruptcy in the name of that business. Businesses are steered toward Chapter 11 bankruptcy when they need help reorganizing their debts. If you own a business as a sole proprietor, however, you can file for Chapter 13 bankruptcy as an individual and include the business-related debts for which you are personally liable.
Re: Get the horse, then the cart We are looking for a house now because we are running out of time in this one. Rentals for familys & animals in a decent area are impossible to come by. I have been batteling the CRA for a year now. I have repeatadly sent in the documentation. Either I hear no response or They send me some inane request to play mail tag with info. Until a few months ago I did not know of this board. Since, I have been able to get somewhere with correcting the numerous errors on my reports. Erica is correct Because the buisness was a DBA the Attorney filed 13. It is recorded & when you call to verify it does say a Business BK 13. Erica do you know if it is possible to get it deleted off our CR's because of the way it is listed? Yes, we made mistakes in the past. We paid for it dearly. How long do you have to be punished for those mistakes. 2 1/2 years clean from the 13 showing & 6 1/2 years from the other. Nothing embetween, but I guess that isn't enough. Sorry we chose to pay off the buisness creditors so we don't have $40K sitting in the bank. We had no personnel bad credit in the bk 13 & had been clean since the ch 7 in 1995. Because we chose to not get CC's we're being damned for that too. I just get so angry cause people condem you for something that was totally out of our control. I could commit armed robbery & get less time in jail then you get condemed for bad credit. Thanks to all those that have answered & cared. Becky (feel better now)
Re: Get the horse, then the cart Just for anyones information. I contacted the Atlanta divison of FHA which governs my area. You must be discharged from a CH 7 for 2 years. A CH 13 must be either discharged or Dismissed for 1 year to qualify. Otherwise if you are still in it you must be into it 1 year. That was from the horses mouth! Becky
Re: Get the horse, then the cart Was it discharged, or dismissed? In what month and year did you make the first payment to the bankruptcy trustee for the Chapter 13 plan? When did you make the last? Or, did you ever make any payments? If it was dismissed, when was it dismissed? If it was dismissed, did you return to making the payments to the creditors? Sometimes Chapter 13s are resolved through Chapter 7 liquidation if the bankrupt cannot even make the Chapter 13 required payment. Is that what happened? Nobody can help you if they don't understand what you're saying. My quote was directly from the FHA guidelines. You can read them at www.hud.gov. Search for Directive Number 4155.1: _________________________ E.Bankruptcy. A bankruptcy (Chapter 7 liquidation) will not disqualify the borrower if at least two years have passed since the bankruptcy was discharged and the borrower has re-established good credit (or has chosen not to incur new credit obligations), and has demonstrated an ability to manage financial affairs. An elapsed period of less than two years (but not less than twelve months) may be acceptable if the borrower can show that the bankruptcy was caused by extenuating circumstances beyond his or her control and has since exhibited an ability to manage financial affairs and the borrower's current situation is such that the events leading to the bankruptcy are not likely to recur. A borrower paying off debts under Chapter 13 of the Bankruptcy Act may also qualify if one year of the pay-out period has elapsed and performance has been satisfactory, and the borrower also receives court approval to enter into the mortgage transaction. _________________________________ It doesn't say anything about dismissals. Please call that person at the FHA office to whom you spoke and ask them exactly where in the guidelines it refers to dismissed bankruptcies-- or how an underwriter is supposed to know when to shoot fro the hip like they did. You said you had no personal bad credit in the Chapter 13. That's not true. It was all personal bad credit; don't kid yourself. You didn't set up a corporation (a legal person; and entity), so the debt was yours. There's nothing inbetween. If you really think you can have the BK removed because its a Business BK 13, just send the bankruptcy documents to the credit bureaus, order them to remove it, wait 30 days, then sue them if they don't. Your personal financial situation wasn't out of your control unless you signed the agreements to pay the debts under duress. It is unfortunate that you failed, but your were calling the shots. If you failed at self-employment, you should stay away from it. Two bankruptcies in four years is a lot of seriously bad credit. What down payment do you think is reasonable for someone with your performance?
