"From Denials to Keys in Hand: How We Closed a Purchase with Bankruptcy, Foreclosure, and Limited Funds"

Buying a new home is stressful enough. Add in a recent bankruptcy, foreclosure, and a credit score under 660, and most banks will tell you it’s impossible. That’s exactly the challenge we faced for a borrower relocating from Colorado.

The Situation

• Borrower had a Chapter 7 bankruptcy and foreclosure in the past 3 years.

• Credit score was below 660 — outside of guidelines for most lenders.

• Income came from being self-employed, but his tax returns didn’t show enough to qualify. We had to use bank statements to prove real cash flow.

• Assets were another challenge. He expected $200K from the sale of his Colorado home, but after an unexpected IRS bill, he walked away with just $80K. To close, he had to rely heavily on business funds (and still meet reserve requirements).

The Complications

• Multiple lenders flat-out declined the deal.

• One lender’s appraisal field review came in low, jeopardizing the purchase.

• Property was in a rural area with few comps, making the valuation even harder.

The SolutionWe pivoted, found the right investor, and documented the business funds carefully. We secured a CDA review that confirmed the appraisal value and built the case around the borrower’s true ability to repay.

The Result

• Closed at 80% LTV

• Secured a 30-year fixed loan at 7.875% (far below the 10%+ private/hard money options he thought were his only choice)

• Helped him move into his new home when others said it couldn’t be done

Why This MattersThis is exactly what sets a true mortgage broker apart: the ability to solve complex situations, navigate around dead ends, and find real solutions for clients who don’t fit the cookie-cutter box.

At Most Home Loans, we don’t just take the easy files. We find solutions for the tough ones.