Bankruptcy and Foreclosure

June 27th, 2023

BlueHub SUN can help homeowners in foreclosure who have filed for bankruptcy

For homeowners in bankruptcy, there are few options to refinance into a new mortgage loan. You may have clients that can afford their normal monthly mortgage payment but may not be able to afford the loan’s repayment terms. Your clients may be facing foreclosure because they had a home equity loan with a balloon payment that came due, and which cannot be restructured in bankruptcy. Or you might have clients that are not eligible for a refinance because of past bankruptcy filings showing on their credit report.

BlueHub SUN understands that families may have had a financial hardship that caused them to fall behind on their mortgage and file for bankruptcy. With SUN, bankruptcy is not the end for homeowners in foreclosure.

Why homeowners in foreclosure file for bankruptcy

People typically file one of two types of bankruptcy:

  1. Chapter 7 liquidation bankruptcy, where the homeowner agrees to sell their property to pay back outstanding debts
  2. Chapter 13 reorganization bankruptcy, where the homeowner avoids having to sell the property but remains in bankruptcy until they fulfill a repayment plan

In both cases, the bankruptcy filing triggers an automatic stay that stops the foreclosure proceedings and allows the homeowner to keep their home while the bankruptcy case remains open. The type of bankruptcy determines the length of the stay – a few months for Chapter 7, three to five years for Chapter 13.

While filing for bankruptcy can result in foreclosure prevention, bankruptcies are on a homeowner’s credit report for up to 10 years and make it very difficult for them to refinance their mortgage loan. But with BlueHub SUN, bankruptcy isn’t the end.

How BlueHub SUN works with bankruptcy clients

Whether a client is in active bankruptcy or has filed for bankruptcy in the past, BlueHub SUN can help them refinance or apply for a new 30-year mortgage. As a foreclosure relief mortgage lender, we typically work with two types of bankruptcy clients:

  1. They’ve previously filed for bankruptcy and have that on their records.
  2. They’re in active bankruptcy and are seeking a better option.

Since BlueHub SUN only works with clients in default or foreclosure, we do not use credit score as an underwriting metric and bankruptcy status is not a disqualifier. We are also experienced at working closely with bankruptcy attorneys to ensure bankruptcy court approves a client’s new loan with SUN.

Over the years, BlueHub SUN has helped hundreds of bankruptcy clients avoid foreclosure by refinancing out of their original mortgage loan. If you have clients that have a regular source of income that are facing foreclosure, call us at (855) 604-4669 or submit an inquiry and we will review their situation.

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