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Aug 2014

How Soon After Bankruptcy Can I Get a Mortgage?

Posted by / in After Bankruptcy, Blog / 4 comments

Good News:  Fannie Mae Announces New Shorter Waiting Period for After Bankruptcy Mortgage.

Here’s the most important question for people who file bankruptcy because they can’t make their house payments:  How soon can I buy a house again?

Since the housing crisis, there have been two waiting periods:  Two years after the bankruptcy; but three years after the house is foreclosed.  (As long as “extenuating circumstances” led to the bankruptcy.  With no “extenuating circumstances,” the rule is and was seven years.  That’s the penalty for “strategic default.“)

That three years after the foreclosure was a big stumbling block to a lot of people.   Often the house did not foreclose for a year or more after the bankruptcy was discharged.  (That’s why I tell people, don’t move out!)   So that three year waiting period turned into four or five years.

Bette Moose mortgage lender

Bette Moody, with Primary Residential Mortgage, checked behind me to make sure I read the new after bankruptcy mortgage policy right

On July 29, 2014, Fannie Mae announced a new policy.  From now on, the two year after bankruptcy mortgage rule applies.  But if you discharge the mortgage debt in your bankruptcy, you do NOT have to wait three years after the actual foreclosure.

This means hundred of people I know, and tens of thousands nationally, can buy a house again a year or two sooner.  That’s fair to them, and good for the country too.  It’s fair, because it’s not the homeowners’ fault that the mortgage companies don’t get around to foreclosing.  And good for the country, because more houses will be built and sold.


At least some lenders think this rule only applies if you list your house in your bankruptcy as surrender.  Those lenders say, if you listed it as keep–and then change your mind–the three year rule still applies.

PS  I want to thank John “the Ionizer Guy”-one of my blog readers.  John was the first person who pointed out this new after bankruptcy mortgage rule to me.  (Google says a thousand people a day read one of my blogs.)

And also Bette Moody.  Bette is a branch manager for Primary Residential Mortgage.  She checked behind me, to make sure I had this right.



PPS  A month after I first posted this, the Washington Post ran a good summary, The New Federal Guidlines–The Washington Post

PPPS  A friend, who filed bankruptcy with someone else, told me she got an after bankruptcy mortgage approved by George Mason Mortgage, while still living in the old house, included in her bankruptcy, that had never been foreclosed.

PPPPS–December 2015.  Heard today from Jake and Donna.  They filed Chapter 7 bankruptcy with me in the Summer of 2011.  Afterwards they tried to work out a loan mod with Bank of America.

Spring 2012, they gave up on trying to talk to Bank of America and moved out.  Please foreclose, they told the bank.  The house sat vacant for three and a half years.

While the house was vacant, and Bank of America doing nothing about it, Jake and Donna, got on with their lives.  They rented for two years; then this summer they bought a new house.  Just over two years after they moved out of the house that was discharged in their bankruptcy.

Jake contacted me, just to let me know Bank of America is finally foreclosing on the old house, January 8, 2016.  


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Robert Weed has helped fifteen thousand people file bankruptcy in Northern Virginia. Robert Weed is a frequent panelist and speaker at the meetings of the National Association of Consumer Bankruptcy Attorneys. He is one of Northern Virginia’s most experienced personal bankruptcy lawyers. As an expert on changing consumer bankruptcy laws, Robert Weed has been interviewed on local and national TV and quoted in newspapers across the country.

  • Gerald Vonberger

    November 7, 2014, pm30 9:37 PM

    That’s pretty amazing that the wait to get a mortgage after filing bankruptcy is so short. I have pretty bad credit right now, so I was considering filing for bankruptcy in the next year or so. One of my biggest hangups was that my wife and I want to buy a house in the next few years. It sounds like if we do this bankruptcy right, we’ll be able to get a house still within a few years. Of course, I think we should probably talk to an attorney before we get too carried away.

    • Robert Weed

      November 7, 2014, pm30 9:58 PM


      Exactly. Lots of people avoid bankruptcy thinking they are protecting their “good credit” when all they are really doing is continuing their bad credit.

      Clean it up! Talk to a good lawyer in your area, and thanks for sharing.

  • Rob Crawford

    August 19, 2015, am31 1:21 AM

    I filed bankruptcy in Dec 2009. My house has still not been foreclosed even though we were prevented from entering the house and there were locks on the doors in 2010. We are not able to get another house even though the house was included in the bancruptcy. We really need some help. Our credit is now over 700 and we are hoping to get our life back together.

    • Robert Weed

      August 19, 2015, pm31 2:35 PM


      You should be able to. Maybe you need to talk to another lender. It used to be the regs that you could get approved two years after the bankruptcy BUT it had to be three years after the foreclosure–and if the house was still there the three years hadn’t started.

      But they changed that. If there’s a bankruptcy, it now doesn’t matter if the house has never foreclosed. I have more info here. https://robertweed.com/2014/08/26/soon-bankruptcy-can-get-mortgage/. It includes some lenders in my area who know these rules and have made these loans. Don’t have any national recommendations to give you.

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