Loans By Kathy: Second Chance Mortgage

Second Chance Mortgage

Wouldn't everyone like a second chance?  The Second Chance Mortgage is a program designed for individuals that have experienced an ecomonic hardship that resulting the loss of their home or filing a bankruptcy.  This is an FHA mortgage product that will help give many a second chance at homeownership.

Here are the basic requirements:

  • An economic event resulting in a loss of at least 20% of their income that last for more than 6 months.
  • Maintained good credit prior to the ecomonic loss
  • Has reestablished credit
  • Has an 12 month rental history that is documented by canceled rent checks
  • No collections

This program is available for all FHA case number pulled between August 15, 2013 and September 30, 2016.  You won't want to waste time to find out if you will qualify or what needs to be done in order to qualify.

If you have lost home, had to file bankruptcy, this may be a way to get your financial goals back on track.

For more information, please contact your licensed mortgage loan originator for a analysis of your specific situation.


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Kathy Sheehan Senior Loan Officer






Bay Equity LLC

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11475 Great Oaks Way, Suite 350, Alpharetta, GA 30002

800.BAY.3703 Bay Equity LLC NMLS ID#76988



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The opinions and general information in this blog are soley those of Kathy Sheehan.  Specifics regarding an individual case should be discussed in detail with a loan professional.  For a confidential consultation, please feel free to contact me via phone or email.  All terms and conditions are subject to change.


Comment balloon 45 commentsKathy Sheehan • September 15 2013 04:13PM


Kathy: Thanks for this valuable information. At least something constructive is being done about our future housing market, but I still have to be skeptical on any government program.
Posted by Jimmy Faulkner, The Best Of St. Augustine (Florida. Homes Realty & Mortgage) almost 6 years ago

Jimmy, the biggest obstacle I see is documenting the economic event.  We will see.  I have two of these deals in process now.

Posted by Kathy Sheehan, Senior Loan Officer (Bay Equity, LLC 770-634-4021) almost 6 years ago

Kathy, great information, thank you for sharing.  There are so many people that have been affected by the events of the last several years.  If this program works it will instill hope and perhaps trust to encourage individuals who have struggled.  Moving on and having the ability to purchase a home would be the best cure for those affected.

Posted by Deborah Laemmerhirt - REALTOR® Brookfield,Newtown,Roxbury,Bridgewater,Washington,Sherman, Luxury Homes,WaterFront,Equestrian,NewConstruction (Keller Williams Luxury Homes International) almost 6 years ago

Kathy, I like the name for this and just hope it proves to be as helpful as it sounds and it won't be shot down by underwriters.

Posted by Debbie Reynolds, Your Dedicated Clarksville TN Real Estate Agent (Platinum Properties) almost 6 years ago

Deborah, it will help those that have managed their finances to overcome the obstacles.


Posted by Kathy Sheehan, Senior Loan Officer (Bay Equity, LLC 770-634-4021) almost 6 years ago

Debbie, I will certainly keep you posted.  My feeling is to run any "out of the ordinary" scenarios past the underwriter before they look for a home.

Posted by Kathy Sheehan, Senior Loan Officer (Bay Equity, LLC 770-634-4021) almost 6 years ago

Kathy:  You prove what a great service Lenders can provide here on AR .. and elsewhere.  We can be educators ... and facilitate someone's financial healing.  You do both with this post .. great job!


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Posted by Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi, 708.921.6331 - 40+ yrs experience (NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656) almost 6 years ago

Thanks Gene!  That is a beautiful compliment and much appreciated.

Posted by Kathy Sheehan, Senior Loan Officer (Bay Equity, LLC 770-634-4021) almost 6 years ago

Kathy this is an exciting opportunity.  People should take advantage of this if it frees up some of their cash.

Posted by Merline D Pennant - New homes, Short Sales and Pre-foreclosures, New City, New Towns, New homes (Regal Realty of the Treasure Coast LLC) almost 6 years ago

Merline, there is a short window of opportunity so having the conversation soon will be in their best interest.

Posted by Kathy Sheehan, Senior Loan Officer (Bay Equity, LLC 770-634-4021) almost 6 years ago

Good post and even though I think, personally, it will not live upo to expectations as the criteria to fit into this is tight but I also know it will give some benefits that otherwise would be a flat denial

Posted by David Shamansky, Creative, Aggressive & 560 FICO - OK, Colorado Mtg (US Mortgages - David Shamansky) almost 6 years ago

Thanks so much for this great information,  I am planning to bookmark this page. 

Posted by Suzanne Taylor, Home Sales In Corpus Christi, TX (Ultima Real Estate - Corpus Christi) almost 6 years ago

David, I have two in process now.... I will let you know how it goes.

Suzanne, my pleasure!

Posted by Kathy Sheehan, Senior Loan Officer (Bay Equity, LLC 770-634-4021) almost 6 years ago

Sometimes I get so busy working the pipeline I forget to look up and see what's new out there for my clients.  Thanks for the heads up.

Posted by Chris Ann Cleland, Associate Broker, Bristow, VA (Long and Foster REALTORS®, Gainesville, VA) almost 6 years ago

Always a pleasure Chris Ann.

Posted by Kathy Sheehan, Senior Loan Officer (Bay Equity, LLC 770-634-4021) almost 6 years ago

This is very good information to know and I had not heard about it!  Thanks so much for keeping us on tops of things in the mortgage world. 

Posted by Susan Haughton, Susan & Mindy Team...Honesty. Integrity. Results. (Long and Foster REALTORS (703) 470-4545) almost 6 years ago

Susan, always happy to do that!

Posted by Kathy Sheehan, Senior Loan Officer (Bay Equity, LLC 770-634-4021) almost 6 years ago


Great message, as you have stated this is a wonderful program that is being initated, however, it's going to be very difficult to document that "economic event".

As a real estate professional that specializes in short sales, we see our share of people that are taking advantage of the system and we actually elect not to do business with them.  But we also see our share of honest, hard working Americans that just have fallen on hard time and need help because they can't keep their heads above water any longer. 

Just wish the government would see this in a bigger light and assist them even further, but this certainly is a step in the right direction! 

Thanks again Kathy!

Posted by Nakia Brooks, Selling GA, One yard at a time! (GaRealtyGroup | 2ShortSaleGuys) almost 6 years ago

Kathy - I was aware of the program though I didn't know there was a deadline on it.  Thank you for the info.

Posted by Christine Donovan, Broker/Attorney 714-319-9751 DRE01267479 - Costa M (Donovan Blatt Realty) almost 6 years ago

Thanks for the information.  This program may be just what some home buyers need!

Posted by Kat Palmiotti, The House Kat (Grand Lux Realty 914-419-0270 (NY),, (MT) 406-270-3667, more information to be provided shortly) almost 6 years ago

Thank you for the information. I will share it with others.

Posted by Gita Bantwal, REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel (RE/MAX Centre Realtors) almost 6 years ago

I agree that we all need a second chance in life now and then. My concern is that get way too lose and we get back to the Sub Prime days. Make sure the borrower can repay the debt.

Posted by Chuck Mixon, Cutler Bay Specialist, GRI, CDPE, BPOR (The Keyes Company) almost 6 years ago

Katy - Thanks for the great post on this mortgage product, that I was not really aware existed.  It is another valuable tool to know about when I meet potential buyers that have lost a home or filed for bankruptcy.

Posted by AJ Heidmann ~ CRS, YOUR Alexandria & Arlington, VA Real Estate Expert (McEnearney Associates, Inc.) almost 6 years ago

Good Morning:  Sounds like a great program!!  Keep up the good work and good luck with your business,  E

Posted by Ed & Tracy Oliva, The Oliva Team Arizona Agents (West USA Realty - Arizona) almost 6 years ago

Good Morning:  Sounds like a great program!!  Keep up the good work and good luck with your business,  E

Posted by Ed & Tracy Oliva, The Oliva Team Arizona Agents (West USA Realty - Arizona) almost 6 years ago

These are a great idea... so often people were caught up in something not of their own making, but it doen't mean their other credit isn't good or that their income isn't good.

Posted by Nina Hollander, Your Charlotte/Ballantyne/Waxhaw/Fort Mill Realtor (Coldwell Banker Residential Brokerage ) almost 6 years ago

Kathy, sounds like a good program for those who qualify. A great opportunity for that second chance.

Posted by Michael Setunsky, Your Commercial Real Estate Link to Northern VA almost 6 years ago

Kathy what a great mortgage program, It Sure will help a lot of buyers who have been wanting to buy but did not have a mortgage that suited their situation. 

Posted by Scott Godzyk, One of Manchester NH's Leading Agents (Godzyk Real Estate Services) almost 6 years ago

Useful and encouraging post for the ones who miss-tepped....Welcome back

Posted by Richie Alan Naggar, agent & author (people first...then business Ran Right Realty ) almost 6 years ago

A lot of people nowadays are looking second chances. .great post! 

Posted by Fernando Herboso - Broker for Maxus Realty Group, 301-246-0001 Serving Maryland, DC and Northern VA (Maxus Realty Group - Broker 301-246-0001) almost 6 years ago

Kathy, finally something to help the people who tried to do the right thing and be the right people! I guess the economy is strong enough where banks feel they can reach out to these folks.

Posted by Sharon Alters, Realtor - Homes for Sale Fleming Island FL (Coldwell Banker Vanguard Realty - 904-673-2308) almost 6 years ago

Kathy, this is interesting and very good information for those people who fell on hard times and currently cannot qualify for loans based on that history.

Posted by Silvia Dukes PA, Broker Associate, CRS, CIPS, SRES, Florida Waterfront and Country Club Living (Tropic Shores Realty - Ich spreche Deutsch!) almost 6 years ago

This is good information.  I've already alerted my past short sale sellers. One of the most frequently asked questions is when will I be able to buy another house. 

Posted by Wendy Smith, Real Estate Advisor (Wendy Smith Real Estate) almost 6 years ago

Kathy, this seems to be a great program - should be helpful to couple of my clients. Thanks for sharing.

Posted by Praful Thakkar, Andover, MA: Andover Luxury Homes For Sale (LAER Realty Partners) almost 6 years ago

Kathy, can't keep up with everything. Thanks for sharing this important information. 

Posted by Frank Rubi, (Frank Rubi Real Estate, LLC) almost 6 years ago

Ditto the comment above. Thanks for keeping us in the know.

Posted by Jill Sackler, LI South Shore Real Estate - Broker Associate (Charles Rutenberg Realty Inc. 516-575-7500) almost 6 years ago

First that I've heard about this. Wish I had read this an hour ago before the Staff Meeting which had a Mortgage Company giving their info out. I could've asked them if they work with this.

Posted by Travis "the SOLD man" Parker; Associate Broker, email: / cell: 334-494-7846 (iXL Real Estate-Wiregrasss\) almost 6 years ago

I have actually filed 7 past home owners that we are trying to document for this FHA program.

As a lender we are still getting our underwriters to understand this and an end investor that is copacetic with the program. 

only time will tell if this ever gains traction

good luck out there

Posted by Ron Aguilar, Mortgage & Real Estate Advisor since 1995 (Continental Mortgage) almost 6 years ago

Excellent news, Kathy.  What is the minimum credit score required for the Second Chance Mortgage program?  Re-blogged.

Posted by Jeanne Dufort, Madison and Lake Oconee GA (Coldwell Banker Lake Country) almost 6 years ago

Kathy, thanks for introducing me to the "Second Chance Mortgage!"

Posted by Sharon Parisi, Dallas Homes (United Real Estate Dallas ) almost 6 years ago

Interesting information but how many previous homeowners under those specific circumstances would be eligible for that program? 

Posted by Kimo Jarrett, Pro Lifestyle Solutions (WikiWiki Realty) almost 6 years ago

It seems to be a good product but I wonder how many people if will really help. Much like the HAMP, etc. not enough people to actually take advantage of it.

Posted by Lyn Sims, Schaumburg IL Real Estate (RE/MAX Suburban) almost 6 years ago

Very good & timely info - thanks so much for sharing!

Posted by Edith Schreiber, Dallas Area Real Estate (Luxury Homes, Move Up Buyers, 1st Time Homebuyers, New Construction) almost 6 years ago

Hi Kathy, great post and summary of the new FHA program.  It needs to get out to more folks.

Posted by Bob Miller, The Ocala Dream Team (Keller Williams Cornerstone Realty) almost 6 years ago

Well we can always use new programs to get people back into home ownership.

Posted by Gene Riemenschneider, Turning Houses into Homes (Home Point Real Estate) almost 6 years ago