unable to get a loan; it just makes it more difficult to close. Working through a bankruptcy takes a skilled lender, especially if the bankruptcy was recent. The best thing you can do in this situation is know what bankruptcy programs are available and whether or not your client will likely be approved for one of those programs.
Recent Foreclosure
A recent foreclosure or deed in lieu is a major red flag. Foreclosures inevitably mean that the loan will not be easy, maybe even impossible. Many lenders simply will not loan to someone with a recent foreclosure. Again, there are some programs lenders may offer that will assist, but the list of qualifications will likely be pretty long. It is best to be honest with the buyer about the odds of obtaining a loan when a foreclosure is in the cards.
Short Sale
When a homeowner has mortgage debt that is worth x, and sells that mortgaged home for a price that is less than x, that is called a short sale. Home shoppers who recently underwent a short sale are in the same position as those with a recent foreclosure when it comes to attempting to obtain a mortgage. Lenders see short sales as a type of foreclosure, in that the previous lender gave the borrower a certain amount of money and the borrower didn’t pay it all back.
Vehicle Repossession
Banks take vehicle repossessions seriously and frown upon them in credit decisions. People need a car to get to and from work, and having a vehicle repossessed is a solid indicator that the buyer is not financially responsible. This does not mean they can’t be approved for a loan, but it makes it more difficult. An
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