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Can I qualify for a mortgage loan after foreclosure and bankruptcy?

A few years ago we received bad financial advise from a broker. This resulted to two foreclosures. The first house was foreclosed on 11/08 and the other on 7/09. Later we filed for bankruptcy chapter 7 and discharged on 01/09. Since then we have been renting and saving money. We have good jobs and we have been rebuilding our credit. My wife and I have average 685-695 FICO score with the 3 credit companies. We have been wanting to own again. How soon can we qualify for a loan? Do some companies pre-approve with large downpayment? Or are able to qualify people who have both foreclosure and bankruptcy?

I heard its 2 years for FHA home loans. but I'm a bit confused with the 3 years on foreclosure since the two homes that were foreclosure was discharged on the bankruptcy. Please advise.
  • November 01 2011 - Dublin
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Answers (9)

I checked with one of the lenders that I have used in the past.  He told me that 3 years on a chapter 7 was the standard.  This is from the date of dismissal. I would go and talk to a couple of different lenders to get all facts you can, and to be sure they are leading you in the right direction.
  • August 16 2013
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Hi mra75
its three year from foreclosure date to application and 2 years for bk 7 discharge date to application . 
it looks to me you are ok . as long other compensation factor ok too.
  • August 16 2013
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  • July 21 2013
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Absolutely. Work w/ any lender and he/she will point you in the right direction. The time may not be today you qualify for a loan, but the lender will help you get "your ducks in order' to secure a loan in the near future. It is always best to have knowledge.
  • July 15 2013
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Hi, I filled bankruptcy 2 1/2 years ago, and it has discharged. I also have 2 foreclosure's 3 years ago that were included in my bankruptcy. I just applied for a mortgage loan, and was denied. He said reason being is because my 2 foreclosure's were traditional loans, and I will not be able to get a mortgage for seven years. Is this true? I have rebuilt my credit, and my middle FIFO is 689.
  • July 14 2013
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The following is for an FHA loan:

AUS Approve/Eligible or Accept recommendations where the credit report or AUS indicates
prior bankruptcy, foreclosure or short sale are permitted as long as FHA guidelines are met (3
years since foreclosure or short sale, 2 years since chapter 7 discharge), however the
underwriter should verify the data integrity in these instances. Reminder in regards to Chapter 13
bankruptcy with AUS Accept, per FHA: If the Chapter 13 bankruptcy has not been discharged for
a minimum period of two years, the loan must be downgraded to a Refer.
• AUS Refer or manual downgrade permitted with the following criteria only:
• Chapter 7 Bankruptcy: Must be discharged 3 years
• Chapter 13 Bankruptcy: Must be discharged 1 year
• Foreclosure or Short Sale: Must be discharged for 5 years

• Short payoffs or settlements on a mortgage lien are considered the same as a foreclosure so
must be seasoned at least 3 years with an AUS Approval and 5 years with an AUS Refer or a
manual downgrade. Please note that AUS may not recognize the short sale so this should be
analyzed by the underwriter.
  • November 03 2011
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Based on what you say, you should be able to get a mortgage.

  • November 02 2011
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I forgot to mention that the waiting periods I gave were for non-FHA/VA Loans. Someone will come along and give you those.

Happy funding, Rudi
  • November 02 2011
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The required waiting periods are:
1. 4-years on a BK
2. 7-years on a foreclosure

These are not accumulative. Your waiting period is 7-years.

Best wishes, Rudi
  • November 02 2011
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