Qualifying For Mortgage After Debt Settlement Versus Bankruptcy

This Article Is About Qualifying For Mortgage After Debt Settlement Versus Bankruptcy

Many consumers are under the understanding that bankruptcy is the end of them ever getting credit and/or a mortgage. This is not true. Bankruptcy is a federal law that enables consumers to get their debts discharged and/or restructured so they can get a fresh financial start in life. The team at Gustan Cho Associates has helped countless people rebuild and reestablish their credit after bankruptcy. Most of the clients of Gustan Cho Associates have gotten their credit scores to over 700 FICO in less than one year after their bankruptcy discharged date.

Home Loan After Debt Settlement:

Many folks who have gone through a period of financial hardship and fallen behind try to avoid filing for Chapter 7 or Chapter 13 Bankruptcy and try to go through a debt settlement program.

• Homebuyers can qualify for a home loan after debt settlement
• Debt settlement is contacting your creditors and working out a repayment plan on your past due debts
• There are various debt settlement programs where it ranges from a reduced monthly payment, a discounted payoff, or a combination of discounted payoff and reduced payment plan
• Many creditors will try to work with consumers who have fallen behind on their monthly payment obligations and try to work things out with them
• I praise those who go through a voluntary debt settlement program because they are showing financial responsibility and trying to avoid filing bankruptcy to honor their debt obligations
• However, and unfortunately, many lenders view debt settlement as a form of bankruptcy
• Some lenders will not take a look at a mortgage application that reports the mortgage loan client has gone through a debt settlement program

In this article, we will cover and discuss Home Loan After Debt Settlement Versus Bankruptcy.

Home Loan After Debt Settlement And Applying For Mortgage

I have countless of mortgage loan applicants who have gone through a period of financial hardship to an unfortunate economic event.

• Some had gone through a debt settlement program in order to avoid bankruptcy
• Many of these borrowers came to me after getting denied by other lenders for having gone through a debt settlement program

Many Lenders Consider Home Loan After Debt Settlement Same As Bankruptcy

Many lenders consider borrowers who have gone through a debt settlement program the same as if they went through bankruptcy.

• Even though debt settlement is no violation of any HUD, FHA, FANNIE MAE, VA, nor FREDDIE MAC guidelines, many lenders have their own overlays when it comes to debt settlement programs
• Some mortgage lenders consider debt settlement worse than bankruptcy
• Under their views, someone who has gone through a debt settlement knows the system in negotiating debt settlement repayment
• Some lenders view consumers can always file for bankruptcy whereas someone who has filed bankruptcy cannot file another bankruptcy for a period of 7 years
• Actually, these lenders favor bankruptcy over debt settlement
• Unfortunately, many rules and regulations in the mortgage business do not make common sense

The good news is that there are lenders who are willing to work with borrowers who have gone through a debt settlement program and have re-established their credit and show stable employment.

Denied By Lender Because Of Debt Settlement

If you got denied by a lender because you went through a debt settlement program, please contact us at Gustan Cho Associates.  The Team at Gustan Cho Associates will be able to help you.  We represent dozens of investors that do not have overlays on Fannie Mae guidelines and have experience in dealing with situations like these.  Many wholesale lenders who advertise they have no Fannie Mae guideline overlays still do.  From experience, I always take a mortgage application and go over the individual case scenario with a senior mortgage underwriter before I submit the full mortgage application and that is how I am able to get 100% mortgage loan approvals.  Please contact me at www.gustancho.com if you have been denied for a mortgage loan by another lender for having gone through a previous debt settlement program or have been denied for other reasons.  We are direct lenders with no overlays on government and conventional loans. Gustan Cho Associates is available 7 days a week at 800-900-8569 or text us for faster response. Or email us at gcho@gustancho.com.

Restructuring Through Qualifying For Mortgage After Debt Settlement Versus Bankruptcy

The basics of debt settlement versus bankruptcy are paying off the debt consumers owe creditors for less than the face value of the debt. The debt with debt settlement versus bankruptcy is paying creditors either at once or in multiple installments. These debts are normally credit card debts and medical debts. Other debts like turning in auto because consumers can no longer afford the payment and owing a deficit also fall into the debt settlement category. Consumers do not have to hire a debt settlement company. Anything a debt settlement company does, consumers can do it on their own. A debt settlement company is a middle man between consumers and the creditor. Debt settlement companies are not cheap.

Mortgage After Debt Settlement Versus Bankruptcy Process

The debt settlement process is when a consumer is overwhelmed with debt and can no longer meet paying his or her debt and is contemplating bankruptcy or debt settlement. The consumer can hire a debt settlement company. The debt settlement company will then act on the client’s behalf in representing consumers to the creditors. Most likely tell the creditor that the debtor is on the verge of bankruptcy so the creditor is more likely to settle. Consumers can convince the creditor that they are likely a potential charge off, the creditor is very likely to settle. Many debt settlement companies will most likely advise stopping making payments.

Qualifying For A Mortgage With A Lender With No Lender Overlays

Borrowers who had a prior debt settlement and need to qualify for a mortgage after debt settlement versus bankruptcy, please contact us at Gustan Cho Associates at 800-900-8569 or text us for a faster response. Or email us at gcho@gustancho.com. Gustan Cho Associates is a mortgage company licensed in multiple states with no mortgage overlays on government and conventional loans. Gustan Cho Associates are also experts on non-QM and alternative financing loan programs. We have dozens of lending relationships with non-QM wholesale lenders.