Bankrupt, Underwater and Want to Refinance Fox Business

26.07.11

You do not clearly understand the options available to you. Or perhaps I should say the options not available to you. You ask whether it would be preferable to stay in the bankruptcy or try to refinance the mortgage. However, refinancing the mortgage is not an option. If any reader has ever been able to refinance his or her mortgage when the mortgage is upside down, please email me. I would be very interested to know which banks are being so generous. The lender has no incentive -- and all the risk -- when refinancing a loan where no equity exists.

Besides equity in your home, lenders like to see that you are a stable and viable borrower before refinancing. However, you filed a bankruptcy right before the trustee sale of your home. A trustee sale is the result of foreclosure, which means you were not making your mortgage payments. Regardless of the reason you weren't paying, it would be a stretch to prove you're a stable loan candidate since you filed bankruptcy after not paying the mortgage for quite some time.

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Tips to Refinance Your Mortgage After Bankruptcy

Tips to refinance your mortgage after bankruptcy Are you wondering whether you will be able to refinance you are mortgage after bankruptcy? You need not worry as you will be able to refinance your mortgage despite filing bankruptcy. There are a few lenders who can help you get loan despite your poor credit. You might not get a loan on favorable terms if you file bankruptcy. Here are the following ways to refinance you mortgage after bankruptcy: 1. After you have declared bankruptcy ensure that you immediately work on re-establishing your credit report so that you can get refinance loan on favorable terms. Try to save money so that you can make your payment on time. You can get a credit card and pay off your bills on scheduled time.Once you repair your credit then it will be easier for you to refinance your mortgage. 2. You can approach your bankruptcy attorney to know whether you are required to wait for a particular time to refinance your mortgage after bankruptcy. But getting affordable interest on refinance will be contingent on the type of bankruptcy you have filed, your present mortgage loan and your mortgage lender. 3. Make sure that you shop for loans with favorable terms that will be in accordance with your financial situation. Try to find lenders who are willing to refinance your loan after bankruptcy. You can find many lender if you do an extensive research who offers loan on bad credit. The broker can help you provide information about lenders offering best refinancing deal. 4. Your rates will depend on the length of the mortgage or the type of mortgage you apply for like a fixed rate or adjustable rate interest. You mortgage lender can help you find the most favorable terms for you. 5. Once you get loan on affordable interest rate ensure that you apply for the loan online by completing and submitting the form online. Make sure that you apply for the loan immediately before the interest...

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How long after a discharged Chapter 7 bankruptcy can I refinance?

Jan 30, 2008 by prettycre8ive | Posted in Personal Finance

Hi,
The 2-year ARM on my home mortgage (two mortgages) expires August 2008 (home purchased August 2006). However, I filed a Chapter 7 bankruptcy in 2007 (discharged in July 2007). Will I be able to refinance this year? I've heard that Ch. 7's are different from Ch. 13's in terms of the refinancing waiting time.

1 day if u have reestablished good credit, and have the equity, figure you will be lucky to get 69% of the loan to value, and if you dont have reestablished great credit in excess of 720 scores dont bother because it isnt going to happen for u

donald e | Jan 30, 2008

What would happen if Countrywide files bankruptcy in the middle of our refinance?

Jan 09, 2008 by JandJ | Posted in Renting & Real Estate

We have our 1st mortgage w/them and are about to refinance at a better rate in the next 30 days. Rumors are going around they are about to declare bankruptcy.

OK...from someone who has had the bad luck of working for 2 lenders this year who have filed BK......NO...they will not continue to fund loans DURING this process. They MAY restructure, but will not, and can not fund on deals during a restructure.
And although the servicing division will be retained, the lending division would be gone. Bye bye. No more.
NOW...on another note...I dont think they will be filing BK...just my opinion and I pray I am not wrong cause I am banking on them pulling out!!
You can also find what you are looking for at another lender so dont worry.
Good luck!

queenvwr | Jan 09, 2008

Thier normal business ops would continue so your re-fi should be okay. If you feel uncomfortable try another broker.

Bob D | Jan 09, 2008

you'll be fine!

evensonhimself | Jan 09, 2008

usually when a company does that .. its a restructuring of the company... they will continue to make loans..
but good to know since my moms mortgage is due to reset end of this year..

Hayley | Jan 09, 2008

You don't mention whether or not your new loan is with them or not. If not, you have no worries. If it is with them, you will experience an issue. There will be no fundings if a lender has filed for backruptcy.

DannoREA | Jan 09, 2008

Can you refinance your house if you have filed bankruptcy?

Jan 31, 2008 by Tabitha S | Posted in Personal Finance

Just curious...I dont know if there are different bankruptcy laws for each state but I live in alabama...Just curious if we can refinance and if so what all do we have to do to refinance because we are in bankruptcy

in PA & NJ you can, so long as you're not in forclosure. Just get ready for crap loads of paper work, as your broker may need your help getting some of the documents you need

autumn | Jan 31, 2008

It has nothing to do with law. The question is, "Can you find a lender who will make the loan?" The answer is, "Maybe!" Talk to a mortgage broker. They are hungry for business now and will work hard to try and find a loan for you. But watch out! If they find one it will have a high rate of interest, because you are someone who does not manage your money well. You are a high risk borrower.

SuperCactus | Jan 31, 2008

Refinancing basically means that you are taking out a new mortgage to pay off your previous mortgage, except the new mortgage is at a better interest rate (and lower payments) than the previous one. The problem with declaring bankruptcy is that you will find it extremely hard to find any lender that will lend you the money for the new mortgage, and if they do, it will be at such a high interest rate that it won't be worthwhile to refinance.

tardis_mom | Jan 31, 2008

It will depend on when your bankruptcy was discharged and what your new credit rating is at. Pull all your credit reports and dispute everything that was included in the bankruptcy, as soon as they drop off your report your score will increase. The higher your score the less interest you will pay. Good luck

Fred K | Jan 31, 2008

How long after bankruptcy shall I wait to apply to refinance my mortgage?

Mar 07, 2008 by Penny | Posted in Renting & Real Estate

I filed for bankruptcy in 2004 and I have been paying on it for so long now that I have a chance to pay it on out. I have about a year left to go if I don't pay it on out. I want to refinance my house. If I pay my bankruptcy and my case is discharged, how long shall I wait before applying for a loan to refinance my home?

You can refi once it has been discharged since you are more than 24 months out from your filing date. You will need proof that the BK has been discharged. Once you have this, you can get what is called an Expanded Approval Loan. Lots of the big mortgage company's offer this product (Countrywide, Beneficial, GMAC...). A lot of whether you qualify for this loan will depend on whether or not you have had any deliquency or derogatory credit since your filing date. If you have paid everything on time since 04, the you are probably good to refi as soon as you get the discharge papers. If you have had credit issues since then, the it will probably take an additional 12-24 months after discharge to get a refi.
Good Luck!

Jeremy B | Mar 08, 2008

It sounds like you are in chapter 13 BK. Normally you have to wait until you are two years out of bankruptcy before refinancing on a conventional or fha loan. If you want any additional information pertaining to this question, feel free to shoot me an email.

Steve W | Mar 07, 2008

Sounds like you are in a Chapter 13. You can buy while in a Chapter 13 if the court approves. I would think you could refinance also with court approval. Hopefully you only want a rate reduction, not a cash out.

Lisa L | Mar 07, 2008

Of the three banks I've worked for in the last 10 years, all require discharge of a BK. Each also required at least 2 years since filing. One went by the credit score if those requiements were met, but another required 1. a GOOD reason for the BK (divorce and loss of job were not acceptable, someone needed to get sick or die), 2. NO lates or missed payments since filing, and 3. that bank didn't lose any money. I can't remember any more details about the last one. Talk to your bank, see what they do.

daeve930 | Mar 07, 2008

Lots of people think that once they’ve filed for bankruptcy they will be unable to ever get a loan again, and ultimately they are unable to do anything financial ever again. This isn’t always true, there arewill help to improve your credit history in a number of different ways.

Kristina | Mar 08, 2008

How soon can you refinance after bankruptcy?

Dec 06, 2007 by jinxies | Posted in Renting & Real Estate

What if your home is worth $700k and you have a $200k HELOC plus $423k mortgage?
Better idea just to sell or short sale? Payments total are $4818/mo and we make around $72k a year. I was thinking of a refi just to keep the house for about 3 years, then after rebulding our credit, sell it and down size.

There are loans you can get just one day after a bankruptcy has been discharged. However, to obtain a loan for 89% of your home's value you'd have to have a very strong credit score and the interest rate will stink. If 72K is your net income and you're okay living off of $1,100 per month after you pay the mortgage, then you're okay. If the home is truly worth 700K, I would sell. You shouldn't have to do a short-sale if the house is worth what you stated.

C B | Dec 06, 2007

You cannot afford this house. If you can sell your home today for $700k, you should do it. It wouldn't be a short sale because you only owe $623k. You could pay off your loans along with commissions and come close to breaking even (you might even have a few thousand left over). You should then rent until you have enough to put 20% down on a smaller, less expensive house. Good luck!

Kathryn | Dec 06, 2007

You make 72,000 a year and live in a 700,000 dollar house???? Your payments are 4818/mo. Thats 57,816 dollars per year. That only leaves you with a little more than 14,000 dollars to live off of. What the hell are you thinking staying in that house. Get out of it and get something more affordable. Hanging onto it for three mores years won't help.

dubak00 | Dec 06, 2007

This don't make any sense. You do not qualify for the mortgages you have. Are you making this up? At 72K your are paying 80% of income into housing note -- no bank or lender would do this.

canton | Dec 06, 2007

You are going to have an easier time selling it than refinancing. If you are two years out of bankruptcy and have a good post bankruptcy payment history you may be able to refinance but I wouldn't hold my breath. There's no guarantee the monthly payments would be cheaper. It sounds to me you bit off way more than you could chew when you decided to incur that much debt on your income. $72k per year is not enough to be paying for $623k in debt attached to your house. Just sell it and be done with it. If you aren't in foreclosure yet, just put it on the market. All the mortgage companies are going to care about is getting their money. If it's for sale they might be willing to sit tight for a while at least.

Lesley | Dec 10, 2007

Are there any mortgage companies that would be willing to refinance to someone that has filed bankruptcy?

Oct 31, 2007 by newjerseydaniel | Posted in Renting & Real Estate

I have filed bankruptcy in the last year and dont have the best credit but i need to refinance so i dont lose my home. Does anyone know of any companies out there that will work with me?

national city mortgage will, when your 2 years or more out of the b....word...

karen! | Oct 31, 2007

Absolutely, go to www.restructureyourmortgage.com submit your info and a mortgage consultant will call you back in 48 hours. there is no comitment.

J S | Oct 31, 2007

Think you best start looking for an apartment, BK only at most a year old, sorry had your break as with the BK afraid you are going to lose it, hard but honest truth

Pengy | Nov 01, 2007

You can still go sub prime, the rates are not the best. I can give you a free quote.

too l | Nov 01, 2007

yes .....try FHA you cant have any credit lates in the last 12months......they do BK buyouts as well.

if you go elsewhere your rate will be over 8%

Carolinahomerates.com | Nov 01, 2007

There are certainly companies that will do those kinds of loans, but my advice is to do whatever you can to get your credit scores updated prior to applying. There are some options, but there are lots of variables, and each case is unique. Things such as how much equity you have, and your source of income are factors along with your credit. The most critical factor will be how you have managed your credit after the bankruptcy.

Also, do you "due diligence" on any company that makes you an offer from any forum such as this one. Always check with the BBB and do a web search to check out a company that is not a household name to you.

Anthony | Nov 01, 2007

It is possible but not easy. Did you get your discharge already (was it a chapter 7?) You need to shop around until you find someone. The rate won't be amazing but you can at least get a fixed rate if you are trying to get out of a variable rate mortgage.

Just don't let any scammers trick you into a questionable deal. If it sounds too good to be true, it probably is.

Lesley | Nov 02, 2007

currently in chapter13 bankruptcy can we refinance our home and the bankruptcy?

Nov 04, 2007 by susan s | Posted in Renting & Real Estate

we have a mobile-home double wide looks like a modular has a 5/12 roof pitch if that makes a difference.

depends on how long ago u filed... has the bankrupcy been discharged yet? it is possible u may be able to refinance ur home but i've never heard of refinancing a bankrupcy...

usually a bank will approve u for a refinance if since the bankrupcy all ur bills have been paid on time for about 2 years. if u haven't been late on anything, have been at the same job with verifiable income, and have since established ur credit then that can sometimes help u proove that since the bankrupcy u've been able to redeem urself.

if ur still in the process of filing for bankrupcy then forget it. there's no way u will get approved unfortunately. try having someone with good credit cosign for u to help u. the way lenders look at it is that if u just filed bankrupcy because u couldnt pay ur bills, why are they going to give u let u refinance seeing as just so recently u couldnt pay bills? u see bankrupcy is a big deal especially nowadays with all the foreclosures and whatnot. Look at it this way, if u dont get approved dont be disappointed. usually filing BK can help u get back on track and ur mortgage company is willing to work with u to help u out... good luck!

its just me | Nov 04, 2007

As long as you have an active bankruptcy (until it is discharges) you will need the bankruptcy courts approval to refinance.

DOUBLE NET | Nov 04, 2007

Yes you can refinance, but you first have to find a bank that will provide the loan, and once you accomplish that, you need to have your bankruptcy attorney do a motion to approve the loan. If it reduces your monthly payments on your home, it should benefit everyone in the bankruptcy increasing the likelihood it is improved (and I'm sure that's why you'd want to refinance). Don't leave your attorney in the dark, and don't hide the bankruptcy from the lender, or that will cause problems that otherwise won't be caused.

Lesley | Nov 05, 2007

Would it be good to refinance car loan when the current loan is reported as Included in Bankruptcy wrongly?

Apr 25, 2008 by Steven | Posted in Credit

I've got a car loan that was kept through my bankruptcy and I've been paying on for approx two years since now and just realized they reported it as part of my bankruptcy and they will not change(included is said because it was written about in the papers even though it was reaffirmed). I'm trying to now fix my credit up some and would like to know if it will help or even effect at all my credit to refinance it now?

I went through this same thing back in 2001 and Ford was not reporting my account, all it took was a simple phone call and they updated the information on the bureaus.

If your lender will not do this, you will have to have proof that you have been making the payments to be approved for a refinance loan.

If you do get refinanced, it will help your credit as long as your lender reports to the credit bureaus.

SPIFIMAN1 | Apr 25, 2008

I want to refinance my two year fixed mortgage. I'm in a Chapter 13 bankruptcy. Any good companies for this?

Jun 25, 2008 by deoarby | Posted in Renting & Real Estate

I have been with the same mortgage company for almost four years. I started with an adjustable mortgage. After two years the rates and payments shot up. I modified with them to a two year fixed. This expires in August. Last November, I filed a Chapter 13 bankruptcy, which includes the mortgage. My attorney says to either work on another modification with the company I have, or to seek out a refinance somewhere else. Has anyone out there been in similar situations? What did you do? Any recommendations on a good company to go with?

When should I refinance or get a bankruptcy buyout loan?

Nov 13, 2008 by anointed and chosen | Posted in Personal Finance

I have been in chapter 13 since Jan of 2007 (mortgage included) and am having a terrible time with my finances. I have 5 children and a vehicle that needs fixed and can't afford to barely breath right now (same old story, right?). I am wondering if I refinance now can I file the secured debt under chapter 7? I also need some understanding between my claimed amount and scheduled amount under my chapter 13. My lawyer is very unprofessional and uncaring and I'm too broke to get a new one.

Be careful! Make sure you seek help from a trusted expert in the bankruptcy field. You don't want to make a mistake that can harm your credit for years to come. Try visting a bankruptcy lawyer to make sure you do the right thing. http://www.bankruptcylawyersite.com

Aloysius F | Nov 14, 2008

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