There is some great news for those considering bankruptcy and those who have already filed. In a recent letter communicating the changes, Commissioner Carol Galante announced a new policy of the FHA (Fair Housing Administration) regarding when a prospective home buyer will qualify for a mortgage loan after having filed for bankruptcy. The previous policy required a two year wait after filing bankruptcy before the consumer would qualify for an FHA mortgage loan. Now, under the new policy, a prespective home buyer only has to wait one year after the bankruptcy filing in order to qualify for an FHA insured mortgage loan. This new standard reflects the hardships faced by borrowers in this economy and recognizes that a borrower’s credit report may not accurately represent a borrower’s ability to repay their mortgage.
In order to qualify under the new standards, the borrower must show that his or her household income fell by 20 percent or more for at least six months and that the reduction in income was the result of events beyond the debtor’s control, such as unemployment, illness or a death in the family. The borrower must also receive one hour of approved housing counseling and have made timely housing payments for the last year.
If you are considering bankruptcy, please contact Laura Margulies & Associates, LLC for a consultation. Fred Nix is an associate with the firm and concentrates his practice to bankruptcy law. The lawyers at Laura Margulies & Associates, LLC have successfully helped thousands of clients to obtain a fresh start by filing for bankruptcy. See our web site at www.law-margulies.com for more details.
FHA Reduces Wait Time After Bankruptcy