How long do bankrupcies affect one's credit? - Posted by Mike

Posted by DT on May 25, 2000 at 01:40:03:

Had I known that they could not satisfy there 6,000 Judgement from the beginning I would of never done the deal…The Brokers were believing this buyer when he said I have the money coming I will pay it off prior to the closing…That day never came… Now I had 45,000 of my money jammed… Had I been there to see this Judgement from the beginning I would of never stopped marketing the property until a satisfaction was presented or another buyer qualified it… I was a loan originator for a few years and know whether a deal is gonna fly at the 1003 Loan app stage and credit report…And as far as a Broker they will say whatever they want not to send a deal away…You forget about there app fees…Thats regardless of whether the loan is approved or not, So alot of these app fees are 500.00 theres why a Broker will allow the loan to be strung at the very least if it cant go through…Has to make it look like he did something for his 500.00 APPLICATION FEE…
Also I am not thrashing Brokers because they do have the sweetest programs, but they do have a tendancy to promise the world and only 65% of them really do what they say they can…

How long do bankrupcies affect one’s credit? - Posted by Mike

Posted by Mike on May 22, 2000 at 15:04:58:


I have a potential buyer that wants to buy a property from me. There credit is good now, but they have a bankruptcy on their credit report from 7 years ago.

Is this enough time for to get favorable financing?


Re: How long do bankrupcies affect one’s credit? - Posted by Craig

Posted by Craig on May 23, 2000 at 13:41:46:

What lenders are generally searching for after a BK is that the borrower has taken advantage of that clean slate and decided to pay their bills and on time. I will tell you that lenders aren’t as lenient underwriting people with late payments and collections and such after those people have had a BK. If they have reestablished their credit and it is clean, most lenders will work with people 2 yrs after the BK is discharged. I have seen BK’s show up on credit reports 15 years after they were discharged, as long as the credit since a BK is clean they are disregarded.

Re: BK’s - Posted by Lori Samson

Posted by Lori Samson on May 23, 2000 at 13:04:20:

If they are trying to get a loan two years after and they are back in the game but if they are trying to get credit cards and other types of credit it could take till it drops off their credit report. It won’t drop off until the 7 years has past since it was ‘discharged’. I had a son pass away from a terminal disease that we filed BK on all the medical bills (1986-1998)and it was on our credit report a total of 12 years because they don’t start the clock until it was discharged! We paid a hard and long price for that one! Lori

Re: How long do bankrupcies affect one’s credit? - Posted by Laure

Posted by Laure on May 22, 2000 at 22:45:00:

Countrywide will loan 2 years after bankruptcy is discharged with good re-established credit. Take these buyers, by the hand, to a good broker. I meet my buyers at the broker and sit with them while they make their application. Then I know the deal. Know if it will happen, or if it won’t. And I don’t waste time with buyers that won’t qualify. When I accompany them, I know the straight Poop, without exaggerations the buyers may want to tell me.

Laure :slight_smile:

Re: How long do bankrupcies affect one’s credit? - Posted by Tom-Pa

Posted by Tom-Pa on May 22, 2000 at 17:05:31:

Mike, After 4 years they will qualify for conventional financing. If they would need 100% financing than you should have them see a mortgage broker. Good Luck Tom

Re: How long do bankrupcies affect one’s credit? - Posted by phil fernandez

Posted by phil fernandez on May 23, 2000 at 06:57:51:


I somewhat disagree with your statement that Laure should not be present when her potential buyers are in front of the mortgage broker. Laure would have an interest to see if this is going to fly or not. Why would Laure want to tie up her property with a buyer that can not get financing.

Perhaps if Laure is present and the mortgage broker can not find a specific program where the buyers would qualify, Laure can interact at that point and maybe tell the broker she would take back a small 2nd or do a buy down or somehow participate in the financing so the loan might fly.

Re: How long do bankrupcies affect one’s credit? - Posted by Craig

Posted by Craig on May 23, 2000 at 02:27:39:

This is just my opinion. I find it hard to believe that you would make a buyer that uncomfortable. I’m sure you actually do it though. I don’t see where you feel you have an interest in those kind of details if you are not the one providing the financing. People with credit problems feel bad enough as it is having the mortgage broker see that stuff. Dont’ get me wrong I know it’s mostly their own fault they have those problems. And I understand your not wanting to waste time with the buyer if they don’t qualify, but that is just a matter of them going to the broker and finding out. Your sitting in to get all of the details is really pointless. Sure if they don’t qualify they might sling some bull your way, but the fact is they don’t qualify and that’s all you need to know. How does your personnally knowing when they had their BK and how many collections and charge offs they’ve had provide you with anymore help.

I think that’s just bad advice. Better advice is for sellers to have a good relationship with a mortgage broker that they can send buyers to, to see if they qualify before the seller let’s that buyer tie up the home. However if you’re taking the risk of actually carrying any financing for that buyer then you need the details.

Re: How long do bankrupcies affect one’s credit? - Posted by Craig

Posted by Craig on May 23, 2000 at 11:35:22:

Phil I think she could do the same thing without knowing all of the details. It’s as simple as the loan officer saying “Hey they only qualify for 85% LTV and only have 5% down, so Laure the only way to make this work is if you can carry 10%”. Now since Laure is considering carrying some financing she has a reason to know all of the credit details.

BINGO nt - Posted by Laure

Posted by Laure on May 23, 2000 at 07:18:33:


Re: How long do bankrupcies affect one’s credit? - Posted by JPiper

Posted by JPiper on May 23, 2000 at 18:01:06:

Just thought I?d jump in to say that I agree with Laure. I have attended a large number of loan applications over the years from buyers. I think it?s a good idea for many reasons.

First, I think I know as much about loans as most of the mortgage brokers out there. Whether that?s true or not, I can tell you that things get ?missed? all the time. As an example, I?ll never forget the buyer who owned several houses around the US. Based on her gross income she didn?t qualify for my property. So as we sat there with the loan officer, I started thumbing through the buyer?s tax returns. I noticed a large negative on one of the properties. I pointed this out to the buyer?who immediately jumped on the phone to her accountant, and discovered that he had inadvertently omitted roughly half the income from that particular year for that property. The result in adding back in that income (and filing an amended return) was that she qualified for the loan. I can assure you that the loan officer would not have picked up this problem. And had I been sitting at home waiting for the loan officer to call, what I would have heard was that the buyer didn?t qualify.

I sold another property to an immigrant, who had part of his downpayment in cash located in his house. The loan officer told him that wouldn?t work, that the funds would have to be in a bank account, and that it would then have to be seasoned. No loan for a while in other words. Since I was sitting there, I argued the point, and successfully got this decision reversed due to the country and practices that the immigrant was from.

I could go on and on with these stories?.but in my view having control is what this is all about. The idea in my opinion is to have sufficient knowledge that when you?re present you can make a difference in the outcome. If you?re sitting at home that won?t be possible in all likelihood.

I?ve never had a buyer express a problem with this?.ever. They want to get the loan, and they know I?m there to help that process. I?m also ?hands-on? in every other part of the process as well. I call this ?making things happen?.


Re: How long do bankrupcies affect one’s credit? - Posted by Laure

Posted by Laure on May 23, 2000 at 07:14:51:

Well, first of all, I ALWAYS ASK them if they would like me to join them. I don’t make it a requirement. Secondly, the majority of my houses are “sold” on a 6-12 month Lease/Option and I NEED to know if they will qualify at the end of the term. I have to make the decision if I will take the chance their deal will fly. I am closing two this week, and another next week, and I accompanied all of them to the broker. Acutally, I think they appreciate my interest. But it all depends on the individual personalities. There are definately some people I wouldn’t bother with, I just wouldn’t work with them in the first place.

Some can close on the spot, and didn’t know they were in good shape. They just assumed they had bad credit.

Now with my closing rate being so high, I wouldn’t say that my advice is bad. In the last year, I’ve had 7 closings using these methods. One didn’t close, and it was because she got married and moved to a larger home.

Laure :slight_smile:

Re: How long do bankrupcies affect one’s credit? - Posted by Craig

Posted by Craig on May 23, 2000 at 19:42:01:

Well Mr. Piper you have brought a fresh perspective to the topic. Your reason of being there to help is one I didn’t detect with Laure. I say to each his/her own.

The thing I gathered from the intitial post by Laure was that she was there to hear all of the details so that she would not hear lies and excuses from her buyers. I will say from the perspective of a loan officer that if a seller were to be present during a consultation with a seller based only on that premise I would not allow it. People who’ve had credit problems in the past (and I know I’ve already said this) feel humiliated enough with my knowing about them. They are comforted by the fact that the info goes to no one who does not have a definate need to know. Which is myself, the lender, and others involved in the process. The only reason they agree to let us have access to those kind of personal details is because “we are there to help”. My sole obligation is to helping the prospective borrower.

I can see in many situations how a buyer might agree to have the seller present because of fear that the seller may not cooperate otherwise. I’m quite sure you may turn up things that many other people would not,and I think if I were the loan officer dealing with you, I would be aware of that and have no problem with your participation. But the mere request or demand of a seller whose sole purpose of being present is “just to know the details themselves” would not satisfy me in allowing them to sit in. If it’s that important to them I say let them take their own application and pull a credit report themselves.

Yes it’s great to have the most control possible. But it’s also great to be dealing with professionals you know you can trust. Most sellers aren’t like you Mr.Piper. They don’t know much about the qualifying process at all. Sitting in does nothing to further their cause. It’s just one more person that will know things that the borrower would rather they not know.

If those kinds of people were sending their prospective buyers to me, I would hope they had the confidence that I would make sure they had all the info they needed, to move the process along without any hangups.

Re: How long do bankrupcies affect one’s credit? - Posted by Craig

Posted by Craig on May 23, 2000 at 11:39:37:

Laure certainly if you Leasing the home to them you’ve a need to know about such things. I got the impression you were just selling the houses and sending your buyers to a 3rd party for financing. In your situation I would maybe sit in with them and the person doing the loan app. I think I actually find all of that info out from having them fill out my own credit or rental app even.

Re: How long do bankrupcies affect one’s credit? - Posted by DT

Posted by DT on May 24, 2000 at 07:23:24:

I agree that if you are a serious Investor not looking to waste time you should be familiar in all aspects of the deal…Including the buyers financing progress…After all if you are being strung along because the buyer isnt being straight with you on the loan origination you are going to loose money…In the beginning I didnt get involved with the buyers financing but that changed once i was strung along for 3 months only to find out the buyer wasnt goonna be able to fulfill his stip sheet and as everyone knows a Mortgage broker cant give you a commitment letter so you have to believe your buyer…I lost close to 2000.00 on that deal do to taxes that accumulated during that time I was wasting with the buyer along with a few other expenses…I now make sure I know everything about a deal I am working including and most importantly the financing progress of the buyer…As far as there being embarassed about there credit I tell people all the time it cant be any worse than mine to make them a bit more comfortable and also assist in helping them clean up there credit by paying off any items that are required by the lender to be satisfied prior to closing…

Re: How long do bankrupcies affect one’s credit? - Posted by Craig

Posted by Craig on May 24, 2000 at 11:59:10:

You’re being strung along had little to do with your not knowing about the buyers credit and financial situation. If you had known all the details from the beginning it still would have happened. Nope a mortgage can’t give you a commitment letter unless it’s from a conventional lender, but then again if you were dealing with a subprime lender directly they wouldn’t give you one either. Which is why the mortgage broker can’t

I doubt you would have had any more abilility than a good mortgage broker to judge whether that loan was going to go through. A good broker wouldn’t have given you such high expectations that the deal was going to fly unless he had some reason to believe it would. A good broker would have not have wasted his time with a borrower that wasn’t putting in the effort to provide what the stipulations required. A good broker would have charged the buyer for the appraisal and credit report right up front, thus reducing the likelyhood the buyer was going to waste his time and not put in the effort to meet the stips.

I heard a few good reasons for being a sit in seller, but the fella who asked the BK question, won’t move things along by sitting in. It’s obvious he knows little about the process which is one of the reasons why dealing with a good broker is a good idea. But he shouldn’t be surprised when that broker or loan officer isn’t willing to allow him to do the sit in that so many of you seem to do. The guy wasn’t asking about lease options, or owner financing or helping the buyer. He was given the advice of being there and knowing everything when he has no need to know everything, and when his knowing everything wouldn’t help himself or his buyers any more than not knowing everything.