Our examination of a consumer's ability to obtain home loans for purchase and refinance of their existing home mortgage uncovered a large market of mortgage lenders with home loan programs specifically designed to meet the needs of borrowers that recently declared bankruptcy.
Although we found that many of the home loan and mortgage refinance programs that accepted recent bankruptcy required one year to have passed since the discharge date, there were other home loan and mortgage refinance programs that accepted people one DAY after the date of discharge.
For borrowers with a recent bankruptcy, we found a tremendous, little known resource that greatly increased their opportunity to not only be approved for a home loan or mortgage refinance, but to be approved at reasonable rates. That service is called bankruptcy "re-listing".
Through re-listing borrowers experienced huge credit score increases in 7-14 days. The credit score increases we measured varied between 50 and 180 points, with the average being 110 points. There were some borrowers (15%) who would not have benefited from the bankruptcy re-listing process because of the manner that their accounts included in bankruptcy were reported to the credit bureaus. Those borrowers did not participate in the re-listing process, as it posed no benefit.
The key to finding these home loan programs is to be properly matched with a home loan professional that specializes in home loans and mortgage refinance that meet the needs of the borrower. We did not find conventional banks and credit unions offering home loan or mortgage refinance programs for borrowers with a recent bankruptcy, particularly borrowers whose bankruptcy was discharged less than one year ago.
In the case of a borrower with a recent bankruptcy, a home loan mortgage professional with access to bankruptcy re-listing services could make the difference between disqualification and approval at very competitive rates.
