Texas Bad Credit Mortgage Lenders
Texas Bad Credit Mortgage Lenders with All Texas tax liens and judgments must be paid at closing.
Texas Bad Credit Mortgage Lenders with Texas Collections and charge offs need to be paid off
except:- Medical Collections- Collection accounts older than 2 years.
Bad Credit Texas Credit Report Requirements
Bad credit Texas mortgage lenders require a three-bureau in-file report for each Bad credit Texas mortgage applicant
obligated for repayment of the loan. Each report should comply with the following:
• The credit bureaus utilized in generating Bad credit Texas mortgage credit reports comply with the Fair Credit
• Appropriate authorization from the Bad credit Texas mortgage is required prior to obtaining credit. (Refer to Credit
Authorization on the following page.)
• Credit supplements must be included in and made a part of the report.
• Historical status for all account/ratings (i.e., R-1, I-2, etc., are acceptable if the meaning is clarified
on the report; vague comment such as “satisfactory”, “as agree,” etc., are not acceptable. (0x30,
0x60, 0x90 is the preferred format.)
• Reports should be numbered or have a beginning and ending statement.
• Must be no greater than 60 days old at closing.
Bad credit Texas mortgage lenders defines credit history as the record of the Bad credit Texas mortgage payment of credit and
voluntary obligations. The credit history is measured on the credit depth, number of obligations and the
demonstrated intent to repay. A Bad credit Texas mortgagewith a past history of consistently meeting financial obligations
provides reasonable justification that he / she is likely to continue to do so in the future.
Minimum Bad Credit Payment History
The minimum credit depth is three (3) acceptable trade lines aged to a minimum of two (2) years for LTVs
greater than 70%. Only one (1) of the three (3) trade lines needs to be seasoned greater than two (2) years
for LTVs equal to or less than 70%. Bad credit Texas mortgage lenders has the discretion to determine the
acceptability of a trade line.
Bad Credit Mortgage Lenders Score Qualifying Determination
Bad credit Texas mortgage lenders grading criteria combines the credit score for consumer credit, the
mortgage/rental rating and income analysis to achieve a loan grade.
The credit bureau score of the primary wage earner is the credit score assigned to the loan. The primary
wage earner is the Bad credit Texas mortgage who is paid the highest salary based on the employment and occupation
information documented in the file. When both Bad credit Texas mortgage are co-owners of the business that is being used
to qualify, the higher of the two scores will be used, regardless of the distribution of business income claimed
on the 1003.
The credit score assigned to the loan is determined as follows:
• If three (3) scores are supplied on the primary wage earner, use the middle of the three (3) scores.
• If two (2) credit scores are supplied on the primary wage earner, use the lower of the two (2) scores.
• Bad Credit Texas Mortgage Lenders do not extend credit to Bad credit Texas mortgage with one (1) or less credit scores.
Example: If three (3) scores are supplied for each Bad credit Texas mortgageon the loan:
Bad credit Texas mortgage 1 (Primary Wage Earner)
610, 650, 670 – middle score is 650
Bad credit Texas mortgage 2
580, 620, 560 – middle score is 580
650 would be used as it is the middle score for the Primary Wage Earner.
The FICO score on the credit report pulled by bad credit Texas mortgage lenders will be used to qualify. In instances where the FICO
score on the broker’s credit report is higher than the bad credit Texas mortgage lenders credit report, the FICO score on the broker’s
credit report may be used to qualify under the following conditions:
• The FICO on the broker’s credit report may not be greater than 25 points higher than the FICO on
bad credit Texas mortgage lenders credit report.
• The broker’s credit report must be 60 days old or less at loan closing.
• The account balances and credit history must not materially differ between the credit reports.
• The broker’s credit report must contain a website or phone number where the accuracy of the
FICO can be validated by the reporting agency.
Consumer Texas Bad Credit Credit Delinquency Collections, Charge Offs, and Repossessions
For the bad credit Texas mortgage lenders collections and charge-offs need to be paid as noted:
• Medical collections or charge-offs in an aggregate amount of less than $5,000 are not required to
be paid (amounts over $5,000 will be considered on a case-by-case basis).
• Collection and charge-offs that are both older than 2 years and less than $5,000 in aggregate
balance are not required to be paid (amounts over $5,000 will be considered on a case-by-case
• Charge-offs and collections may be left open if one of the following is met: (1) the Bad credit Texas mortgage has
sufficient reserves to meet program requirements and still have enough to cover the balance of the
account; (2) if the account is included in the DTI with 3% of the outstanding balance as payment;
(3) a verified payment plan with the creditor evidencing payment amount.
For bad credit mortgage lenders product, all open collections and charge-offs must be paid at closing.
The earliest reporting date last active for a collection account, on either a Bad Credit Texas Mortgage Lenders or
broker credit report will be used to determine the age of the collection, assuming bad credit Texas mortgage lenders determines the broker’s credit report to be acceptable. If the Bad credit Texas mortgage borrower and the creditor have worked
out a payment plan, the account will be added to the DTI and will not be required to be paid off.
Bad credit Texas mortgage lenders Judgments, Tax Liens, Liens, and Delinquent Child Support
Purchase, Rate / Term Refinance, Debt Consolidation Refinance and Cash Out Refinance Transactions:
• Pay all open judgments/liens on title.
• Pay all open judgments/liens that are less than 10 years old. (Judgments and Liens that do not
affect title may be considered to be left open, on a case by case basis)
• Pay any delinquent child support listed on the credit report.
NOTE: Purchase transactions: all items must be paid with Bad credit Texas mortgage own funds.
Bad credit Texas mortgage lenders Consumer Credit Counseling
Consumer Credit Counseling assists individuals with financial management of debts in an attempt to avoid
further delinquencies or possible bankruptcy. Generally, creditors agree to a lesser repayment under a Credit
Counseling plan. A copy of the CCC record of monthly payments covering the look back period is required.
The consumer credit grade determination is based on the grade criteria of a Chapter 13 bankruptcy. The
CCC must be complete and/or paid in full prior to or through closing.
Time Share Accounts
The payment history of a time-share account is treated the same as consumer credit.
The Bad credit Texas mortgage is required to provide a written explanation and supporting documentation for loans in which
the mortgage payment history at the time of submission or funding is 60+ days delinquent. The letter must
explain in detail why the delinquency occurred and a reasonable expectation must be established that the
problem has been resolved and not likely to recur.
BANKRUPTCY- Chapter 7 Bankruptcy
A Chapter 7 Bankruptcy filing allows individuals to liquidate estate assets and distribute funds received
through liquidation to creditors.
The aging for Chapter 7 Bankruptcies is calculated using the discharge date. Chapter 7 Bankruptcies must
be discharged prior to the loan application.
BANKRUPTCY- Chapter 11 Bankruptcy
A Chapter 11 Bankruptcy allows businesses the opportunity to “reorganize” business debt obligations without
having to liquidate all assets. The debtor introduces a plan to creditors, which will allow the debtor to
reorganize financial obligations to improve the financial stability of the business.
The aging for Chapter 11 Bankruptcies is calculated using the discharge date. Chapter 11 Bankruptcies must
be discharged prior to the loan application.
BANKRUPTCY- Chapter 13 Bankruptcy
A Chapter 13 Bankruptcy provides relief to an individual with regular income, who is overcome by debts but
believes they can be repaid within a reasonable period of time. Chapter 13 permits the debtor to file a plan
to pay a certain percentage of future income to the Bankruptcy court for payment to creditors. If the court
approves the plan, the debtor will be under the court’s protection while repaying stated debts. The
Chapter 13 filing date is used for aging for qualification purposes.
The payment plan history should verify that all payments under the plan have been completed. Any open
Chapter 13 Bankruptcy must be paid in full prior to or through closing.
Approval to pay off the bankruptcy is required from the trustee and bankruptcy court. A list of all outstanding
debts reflecting the unpaid balances must be obtained from the trustee. If the bankruptcy is paid through
closing, the final closing statement Closing Disclosure (CD) must reflect the bankruptcy pay off. Regardless
of the loan grade, proof of the bankruptcy discharge must be obtained and included in the loan file.
If wages are garnished to make a plan payment or if the plan payment is delinquent in the last twelve (12)
months, the loan will be considered on a case-by-case basis.
II.10.5 Mortgage Payments Included in Bankruptcy Chapter 13 Plan
If the mortgage payments are included in the bankruptcy payment plan, (Senior and Junior liens), the full
PITIA must be paid as agreed and current.
BAD CREDIT TEXAS MORTGAGE / RENTAL RATING
Determining Mortgage / Rental Rating
The mortgage / rental rating for determining the mortgage pricing is determined by evaluating the ratings on
all properties that the Bad credit Texas mortgage owns.
Charged-Off Second Mortgage
At its discretion, bad credit Texas mortgage lenders may choose to treat a second mortgage that has been charged-off or inactive
for more than 3 years as a consumer account and not a mortgage rating. The charged-off second mortgage
must be paid through the loan. Documentation must be provided to document that the account has been
charged-off or inactive. Additionally, the Bad credit Texas mortgage must provide a Letter of Explanation regarding the
Absence of Mortgage / Rental History
In the absence of a mortgage / rental rating covering the last twelve (12) months, the loan will be considered
on a case-by-case basis.
Free & Clear
In the absence of a mortgage / rental rating on subject properties owned free and clear, a chain of title
covering the last twelve (12) months must be obtained and reviewed by the underwriter for property flipping
and / or suspicious or conflicting property transfers.
Private Party / Non-Institutional Lender
Requires that the mortgage history be documented with twelve (12) months cancelled checks front and back.
If paid by cashiers or postal checks, copies of the past twelve (12) months are required. Receipts for cash
payments are generally not acceptable.
Past Due Balloon Payments
Mortgages with past due balloon payments will be considered on a case by case basis only. Evidence
may be required that monthly payments subsequent to the balloon date are made in a timely manner and
accepted by the mortgagee, and evidence of an extension of the balloon date may be required prior to
Verification of Rent Payments
A rental payment history covering the last twelve (12) months requires verification by ONE of the following:
1. Legible copy of twelve (12) months canceled checks (front and back) or money orders – amount of
checks / money orders must be consistent and match the amount of monthly rent reflected on the
2. Verification of Rent (VOR) or a rating from credit reporting agency if from rental agency. VOR from
a private party is permissible on a case by case basis at 80% or less LTV.
3. Bank statements for the last twelve (12) months which consistently show payment made for rent amount.
4. For B- & C credit grades using alternative documentation, rental/housing history must be verified
via 12 months cancelled checks(rent) or credit report(mortgage).
NOTE: IF Bad credit Texas mortgage RENTS FROM RELATIVE OR THE SELLER OF THE PROPERTY, A VOR WILL
NOT BE ACCEPTABLE, CANCELLED CHECKS OR BANK STATEMENTS WILL BE REQUIRED.
MORTGAGE / RENT DELINQUENCY
Rolling delinquencies are considered one (1) event for 30-day lates, occurring up to six (6) consecutive
times. 60-day lates or greater will be counted individually.
Forbearance / Modification Agreement
All loans with a forbearance or loan modification agreement put in place in the last twelve (12) months will
be downgraded a mortgage rating, and require evidence that the payment terms of the modification or
forbearance agreement have been met.
If the forbearance or loan modification was put in place more than 12 months ago, the loan will be graded
using normal mortgage grading guidelines.
A foreclosure is a proceeding by which the creditor, pursuant to the terms of the trust deed or mortgage, may
cause the sale of the collateral property in full or partial satisfaction of the debt. Such action typically
extinguishes all rights, title, and interest of the owner of the property.
Any real estate loan more than 120 days delinquent will be considered “in foreclosure” unless performing
under a written forbearance or modification agreement.
The look back period for foreclosure is based on the following:
• The date a foreclosure action or forbearance is cured or
• The applicant is no longer reported 120 days delinquent or
• The property was sold at a foreclosure sale.
A Bad credit Texas mortgage with two (2) or more unrelated foreclosures within the last 36 months will be eligible for a
Bad Credit Texas Mortgage Lenders loan on a case by case basis, but in no event shall exceed a 65% maximum
Two (2) or more foreclosures resulting from separate circumstances or occurring several months apart will
be considered unrelated foreclosures. The underwriter must prudently analyze related foreclosures, to
ensure the reason for defaulting on the mortgages were due to extenuating circumstances beyond the
Bad credit Texas mortgage control and such circumstances are resolved and not likely to recur. If the underwriter determines
that foreclosures were related, support documentation must be obtained and included in the loan file.
A short sale is a proceeding whereby a lender allows the current owner of a property to sell that property
with that lender accepting a payoff for less than the current unpaid mortgage balance. See credit grade for
time period allowed.
Deed in Lieu (“DIL”)
A DIL is a proceeding whereby a lender accepts a forfeited title from the current owner in lieu of foreclosure.
The unpaid principal balance is typically forgiven once the lender takes title. These will be treated the same
as a short sale for credit grading and documentation.
Delinquent Property Taxes
Delinquent property taxes are not considered in the mortgage rating. All delinquent property taxes must be
paid current at closing, and all tax and insurance payments must be impounded for future payments.
II.12.7 Short Payoff
These refinances will be treated in the same manner as a short sale for credit grading and documentation,
but will allow a homeowner to keep their home. Financing will be subject to a 5% LTV reduction and a max
LTV of 70%.