Mia Schultz

Hi, I'm a mortgage expert living in Illinois. I am also licensed to help with your home loan in many other States across the Country. Do you have mortgage questions? How can I help? View Profile

Refinance and Save Money Even with a Bankruptcy

Back in 2013, I was working with a gentleman who was trying to refinance his house. He had gone through probably three or four lenders by the time he found me and was unable to refinance because he had a bankruptcy about four years prior to the refinance.

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He was being turned down because most of the lenders he was talking to were telling him that he doesn't even own the home and that he had no right to refinance it because it was included in the bankruptcy.

Unfortunately, a lot of people don't understand the laws around bankruptcy and reaffirmation and how you can still refinance and how that gentleman actually still did own his home.

He had gone to all these different lenders and he was very frustrated by the time he got with us, I had taken his loan, took his application and brought it to my superiors, who also at that point thought that the loan should be thrown away. 

He was actually advised to walk away from the home, let it foreclose and wait his seven year waiting period before he can buy a new property again. What the underwriters and the loan officers don't normally understand is that the loan is not reaffirmed.

It is technically included and discharged in the bankruptcy, but it doesn't eliminate your ownership of a house. So this gentleman continued to pay on his mortgage. He continues to make his payments. He still, as long as he's making good on his note, is never going to get foreclosed on. 

He owns that property even though it was included in the bankruptcy. We had to prove that to our underwriters and even in house and change their view that had been inbred in them for years about what a “home included in bankruptcy” means. And we did end up being able to refinance for him and get him into a brand new loan, saving him a ton of money by the end of it. 

And he was so extremely grateful and we were so excited that we were able to help him in all the google searches that I had been doing at the time to find out about this situation.

I came across so many people who were in the same boat who were trying to refinance that had a bankruptcy. This was post 2007-08 and they were having struggles all the time. So it did open up a new door of something that I began to become a specialist in post bankruptcy purchases and refinances.

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Mia Schultz NMLS # 217815 Mortgage Consultant 509 W. Old Northwest Hwy Suite 100A Barrington, IL 60010 (630) 593-0920 mia.schultz@findmywayhome.com

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About Mia Schultz

Hi, I'm a mortgage expert living in Illinois. I am also licensed to help with your home loan in many other States across the Country. Do you have mortgage questions? How can I help?