Honey, I didn't think it made any difference. Silence is not always golden.

Summary:

Silence is a common defense mechanism in families as the husband tries to wiggle out of his mistakes

He failed to disclose to his lender that his Chapter 13 bankruptcy was in progress during his application process

Not disclosing all the material facts to the lender is a poor strategy with negative consequences. He presumed that the lender would not find out. Was he ignorant or sneaky? However, lenders are good at critical inquiry and have all the database resources to uncover almost everything.

Article:

• The borrower (husband) was under a serious misconception that concealing their ongoing Chapter 13 bankruptcy would be a clever way to avoid disclosing all their financial troubles. However, this is a misguided belief. The lender knows that a court-ordered reorganization plan does not resolve all financial issues but significantly hampers the lender's ability to fully assess the borrower's economic situation and make informed lending credit decisions. If a borrower hides one crucial fact, how many others are waiting to be uncovered through critical inquiry? The repercussions of such actions can be severe, potentially leading to the rejection of the loan application or even legal consequences. In this case, the borrower's application was rejected, and they faced legal action for attempting to deceive the lender.
• The borrower's mortgage broker, who acts as an intermediary between the borrower and the lender, said
• The borrower's mortgage broker said, My client wants to borrow money to purchase a laundromat. They have adequate protective equity in their home and would like a second trust deed sufficient for the down payment. While seemingly straightforward, the primary issue became the borrower's financial stability and ability to take on additional debt, especially when it was discovered that they were in Chapter 13 bankruptcy.

The competent lender responded.

The lender responded reassuringly, "We ran a background check on your borrower. Are you aware they are in a Chapter 13 individual reorganizational bankruptcy filing? Chapter 13 is called a wage earner's plan. It enables individuals with income to develop a plan to repay all or part of their debts." The lender's response underscores theirmeticulous due diligence process and the specific factors they consider when evaluating a borrower in Chapter 13 bankruptcy, instilling a sense of security and confidence in the lending process.

Debtors may propose a repayment plan and make installments over three to five years. Is there an agreed court-approved payment plan? Are the borrowers current on their court-approved payments?"This response underscores the lender's meticulous due diligence process and the specific factors they consider when evaluating a borrower in Chapter 13 bankruptcy, instilling a sense of security and confidence in the lending process.

It is challenging to approve a second lien on the borrower's property.

A lender must evaluate the borrower's creditworthiness and determine if the court approved a discharge of a portion of the debts. A discharged debt constitutes forgiveness, but specified debts, including criminal restitution, domestic support obligations, and student loans, may survive bankruptcy. Discharging debts may also have extreme federal and state recapture tax consequences, which can significantly impact the borrower's financial situation even after the bankruptcy process is complete.

The lender's thorough due diligence process, which includes requiring a copy of the bankruptcy court filing and the payment plan and reviewing the borrower's financial statement to verify adequate cash flow to make monthly payments, is crucial. This process ensures the lender's confidence in the borrower's economic stability, providing reassurance and confidence in the lending process. The lender also checks the borrower's credit history, income sources, and other financial obligations to ensure they can meet their loan obligations. This comprehensive evaluation process protects the lender's interests and ensures that the borrower can repay the loan, instilling a sense of security and confidence in the lending process.

For the borrower's plan to purchase a coin-operated washing machine and dryer venue to be considered, it must be accompanied by a confirmed payment plan approved by the bankruptcy court. This plan, which outlines how the borrower intends to repay creditors, is not just important; it's crucial to the lender's decision-making process, underlining the gravity of the situation and the need for careful consideration.

Given the borrower's confirmed plan and the additional lien required for the down payment, a comprehensive assessment of the potential benefits of the borrower's business plan is essential. The lender will evaluate whether the projected income from the coin-operated washing machine and dryer business can pull the borrower out of their financial difficulties. This assessment can bring hope and optimism to the borrower's economic situation, fostering a sense of positivity and potential in the borrower's financial future. The lender is looking at the borrower's current financial situation and their potential for future economic stability, instilling a sense of hope and optimism in the audience.

As a point of information, withholding information from a lender, including federally related lenders, is a serious felony.