NEED TO KNOW Mortgages, CREDIT, and Bankruptcy

500.10 CREDIT


500.10.01 MAJOR DEROGATORY CREDIT

MAJOR DEROGATORY CREDIT TIME PASSED SINCE OCCURENCE

Bankruptcy (All Except Chapter 13) The 4-year time period remains the same but will now be

applied from either the discharge or dismissal date of the

bankruptcy action.

Chapter 13 Bankruptcy The time period for Chapter 13 bankruptcy actions is

measured as follows:

• 2 years from the discharge date, or

• 4 years from the dismissal date.

Exceptions for Extenuating Circumstances –

All Bankruptcy Actions

The 2-year time period will be measured from the

bankruptcy discharge or dismissal date. No exceptions are

permitted to the 2-year time period after a Chapter 13

discharge.

Multiple Bankruptcy Filings 5-year time period from most recent dismissal or discharge

date required for borrowers with more than one bankruptcy

filing within the past 7 years.

Exceptions for Extenuating Circumstances –

Multiple Bankruptcy Filings

3-year time period from the most recent discharge or

dismissal date

Note: The most recent bankruptcy filing must have been the

result of extenuating circumstances.

Foreclosure1 5-year time period from completion date

Additional requirements that apply after 5 years up to 7

years following completion date:

• The purchase of a principal residence is permitted with a

minimum 10 percent down payment and minimum

representative credit score of 680.

• Purchase of a second home or investment property is not

500.10.02 CREDIT HISTORY

All borrowers require a two year credit history, 4 total tradelines with at least 12 months ( one

must be 24 + months) reporting in the last two years and a valid social security number.

Consumer Credit Counseling

If the borrower participated in consumer credit counseling or debt management program during

which time the counseling agency made payments to creditors on the borrower's behalf. The

following conditions must be met:

1. A minimum of 12 months must have passed since the borrower participated in the

program.

2. The borrower has demonstrated the ability to manage credit since then.

3. The borrower has a satisfactory pay history on all accounts.