MORTGAGES AFTER BANKRUPTCY – IS IT ABOUT TO GET BETTER?
One of the leading questions that I receive while consulting with people is about the effect of bankruptcy on the ability to purchase a home in the future. Despite financial troubles, people tend to look ahead in their lives and see a brighter financial future. This can be especially true when they consider that they could be essentially debt free after many bankruptcies.
A recent article highlights the potential to quickly recover from a negative credit event in order to purchase a home:
http://www.wsj.com/articles/call-it-a-comeback-for-risky-home-buyers-1435185671
The Wall Street Journal article discussed the new lenders pouring into the mortgage market in order to fund home mortgages shortly after foreclosure, bankruptcy or other types of credit events. Typical waiting times for mortgages after such events are normally 2-4 years. According to the article, hedge funds and other private lenders have stepped into the void left behind by traditional lenders. These non-traditional lenders can approve a mortgage loan in just weeks after a foreclosure according the article. Often these lenders charge rates between 5-10% and require down payments of 25% for mortgage loans, well above traditional levels.
The service provided by these lenders is a valuable one. But like the subprime mortgage crisis that caused the financial turmoil of the last few years, it will be interesting to see if the loosening of lending standards causes a return of the high default rates of the past.
At Mickler & Mickler, we attend Court on a regular basis. We have the experience and knowledge to ensure that you receive the correct advice when confronted with difficult financial decisions related to filing bankruptcy. Contact us at 904.725.0822 orbkmickler@planlaw.com.
Bryan K. Mickler
