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According to the HUD:
“A Chapter 7 bankruptcy (liquidation) does not disqualify a Borrower from obtaining an FHA-insured Mortgage if, at the time of case number assignment, at least two years have elapsed since the date of the bankruptcy discharge. During this time, the Borrower must have:
An elapsed period of less than two years, but not less than 12 months, may be acceptable, if the Borrower:
A Chapter 13 bankruptcy does not disqualify a Borrower from obtaining an FHA-insured Mortgage, if at the time of case number assignment at least 12 months of the pay-out period under the bankruptcy has elapsed.
The Mortgagee must determine that during this time, the Borrower’s payment performance has been satisfactory and all required payments have been made on time; and the Borrower has received written permission from bankruptcy court to enter into the mortgage transaction.“
While bankruptcy may seem like the best option for you, it’s important you sit down with a finance professional to asses your individual situation.
Attorney Jon Turner specializes in consultations prior to mediation. If you do not have counsel already, talk to the attorney and get an idea of your options ahead of time. Time is of the essence in these matters and we have seen them pick up the pace when it comes continuing the foreclosures after forbearance.
Some cases, bankruptcy is without a doubt the best option and it is best to start that process as soon as possible. Every foreclosure situation is unique as in how they got to that point, but all the process is always the same. We know how to build you a timeline (first step) so that you have a better understanding of dates. When the home goes to auction, it’s too late.