The minimum seasoning period after a chapter 7 is two years, the exception you would need to prove the bankruptcy resulted from conditions outside your control, such as the death of your spouse, serious illness or natural catastrophe. Depending on the serving bank, you can apply for a FHA loan after 12 months after your discharge date.
You said the 1st mortgage (BOA) was paid off when the property was sold, but you are disputing the heloc. Knowing the heloc was most likely in a 2nd lien holder’s position. If the property was sold to a new owner, in order they have a free-n-clear title, the heloc would have to of been satisfied. This is what you’re going to need to provide proof to the credit bureaus in order to have that item disputed off your report.
You filed a Chapter 7 bankruptcy by discharging your debts. Now you have to show you are being responsible for the debt, you going to need to reaffirm the debt that was discharged.
If the heloc was not paid off (even though they might of received a small settlement to release themselves from the deed, so the property had a free-n-clear title that that BOA could of sold the property). If you reaffirm your debt, the heloc lender could sue you in civil court for the difference.
If it is not taken care of the heloc lender in civil court can get a judgment. That could be attached to your title of your new home. This is the reason why Wells Fargo wants to see the debt satisfied off your credit report.
What you need to next focus on.
- Get proof of satisfaction to show the credit bureaus, it have it removed off your report.
- If the debt still remanings, contact them to possibly settle at a lower amount.
- Reaffirm the debt so it can be satisfied.
Last year I had a case simular to what your looking to do. It appears you have even thing in order disputing your credit only time will heal your report.
As an extra tip - once your in your new mortgage send extra into the payment, noting "apply to principle". One extra payment per year takes takes a 30yr loan to 23.5 yrs. It lowests your net effective rate 2% , but to best is your reported as being more responsible and your credit score can dramically (as in shoot up) raise your score.
Good Luck
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No Reaffirmation on Mortgage - Help!
