One Question - One Answer - Re: Bankruptcy

This weekend someone called and asked me if they were still eligible for a FHA loan though they were less than 2 years out of a bankruptcy. Though you would think that the answer would be No, since the guidelines state very clearly that you must have the 2 year seasoning, I surprised the caller by saying, "This is possible, provided you have extenuating circumstances."

I have closed a loan for a borrower that was only twelve months out of a Chapter 7, however hers was a story that would leave you in tears. She had done a good deed for a relative and by doing so she was left financially strapped. She had the court papers to prove it. I submitted her loan application, credit and supplemental documentation to my underwriter and she granted us permission to proceed. We closed her loan two months ago.

Every case is different but one thing is for sure--you will never know until you ask.