Does anyone know the guidelines for a discharged Chapter 7 Bankruptcy?
FHA LOAN: Chase 1st, PNC HELOC
Does the seller have to provide all of the financial docs requested by bank? (bank statements, paystubs)
Seller's attorney told him he only needs to give the bankruptcy discharge. Chase insists that he provide all financial documents like any other borrower.
If he does not have to provide financials, what guidelines should I give to Chase to?
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This really depends on the attorney who did the bankruptcy. A discharge of debt only releases the debtor. Not the lien against the property unless the attorney filed for this at the time of bankruptcy. So, Chase could very well want all the doc's. After all, they do have the lien on the property.
I had a Chase deal a few years ago. There was a second (also with Chase) that was discharged through BK. At the time, there was a colllection agency that took over Chase HELOC's (can't remember the name but they are located in Texas). The Chase 1st would only contribute 6% to the second, and the collection agency demanded 10% (probably the lowest amount it was allowed to present under its contract with Chase). We were stuck between a rock and a hard place. No one would budge so, unfortunately, it is one of my few that we had to let go to foreclosure. I took it up the chain-of-command and hit a wall. The file was 12" thick.
It seems logical that the 1st is still within its right to require documentation. The kicker is that even though the 2nd may have been discharged in BK, you will still need the 2nd to release the note and that is not an easy thing to do. If the HELOC is with a collection agency, the seller may have to come with cash to get it released. Good luck.