Tennessee residents who have just filed for Chapter 13 bankruptcy may be eager to get back on their feet by making all of their plan payments on time and rebuilding their credit. However, high monthly mortgage payments can sometimes make it more difficult for people to stick to their monthly budget after bankruptcy.
Refinancing a mortgage may be possible after bankruptcy, but homeowners must wait until their credit is reestablished before applying for a new mortgage. Fannie Mae and Freddie Mac will not guarantee a new mortgage for a person who has filed for bankruptcy until two years have passed since the discharge date. People who owes more on their mortgage than their home is worth will only be able to refinance through the HARP program.
Some homeowners can qualify for a program that allows them to refinance more quickly after bankruptcy. The Federal Housing Administration’s ‘Back to Work Program” allows certain mortgage holders to refinance one year after a bankruptcy discharge. To qualify for a faster refinance after bankruptcy, a person must complete HUD-approved housing counseling, show documentation of financial hardship and meet FHA loan requirements.
People may be able to protect their home from foreclosure by filing for Chapter 13 bankruptcy. After the bankruptcy process is completed, an attorney may help the homeowner to apply for a new mortgage with lower payments. If a homeowner does not qualify for traditional refinancing or wants to refinance quickly, an attorney may help to apply for other programs that may be available.