My wife and I want to refinance our mortgage in Houston, Texas. We have a lot of equity, and need to use the equity to make repairs and improvements in the house , and for extremely urgent medical procedures not covered by Medicare.
Our Loan-to-Value (LTV) is only 60 percent, our Debt-to-Income (DTI) is 41 percent, and our FICO score is about 688.
On September 2014, I was summarily terminated from my job. At the same time, I had 9 payments remaining on my Chapter 13 payment plan. My income dropped to zero except for Social Security which was not enough to pay living expenses and the Chapter 13 payment.
This incident qualifies as Exceptions for Extenuating Circumstances, loss of income beyond my control. The result was catastrophic, i.e. the bankruptcy court had no choice but to dismiss, not discharge my case. The primary creditor was the IRS, I owed the 20 percent withholding taxes on IRA withdrawals.
After the dismissal, the IRS removed the lien on our house (our attorney filed a Chapter 7 in my wife's name to apply to the remaining balance owed to the IRS), considered the remaining balance uncollectible and has since left us alone, now going on two years we have not heard from the IRS.
However, every lender I have contacted has turned us down on the refinancing because of the bankruptcy dismissal and the Chapter 7 even though all the above was a direct result of my losing my employment, income which was beyond my control. Lastly, due to Hurricane Harvey, our mortgage company has given us a temporary hardship forbearance plan, deferred payments until December 20, 2017.
