began originating mortgages as the initial tremors subrpime Mortgage collapse warned that the worst was yet to come.  I just thought the job was hard, since I was lucky back then to find even a handful of people who qualified for refinances; everyone’s usual go-to lenders were changing their guidelines which meant that a person needed more than a pulse and a signature to get a loan.  For most of these lenders, this was the classic case of “too little, too late” as many of them eventually went out of business.

Coworkers and managers told me to avoid working with anyone who’d either been through or was currently in a Bankruptcy.  They said it was too much work, took too long, and they needed it removed from their credit profiles first, or else there was nothing anyone could do.  I thought they were right.  Sometime in 2008, while teaching myself as much as I could about FHA loans, I actually read the guidelines for handling borrowers who are in or out of bankruptcy.  That’s when I wondered how many good people I had turned away because of bad advice and misinformation. 

That’s when I decided to make to make this my niche.

Soon, everyone originating loans will have to understand how to do arrange loans for clients with Bankruptcies.  According to an April Time article:

“… more than 1.4 million business and Consumer bankruptcy petitions were filed in 2009, up 32% from the 2008 figure, and… the number of consumer filings (Chapter 7 and 13) in 2010 will likely surpass those in 2009.”

Soon, lenders and brokers will have to reckon with Fha Bankruptcy guidelines.  Why?  There will simply be too many people with bankruptcies in their credit histories.  I doubt the housing markets will be so robust by then that most lenders will have so much business they’ll be able to reject qualified applicants just because of a prior bankruptcy.

Get used to it.  Handling borrowers with previous bankruptcies is the foreseeable future of mortgage lending.

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