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Can I Get Approved for FHA Manual Underwrite Late Payments During Chapter 13
Hello,
I’m reaching out because I’m looking for an experienced FHA lender who can help with an active Chapter 13 situation.
We currently have a new-construction home with Maronda Homes that is already built and ready to move forward. Our financing with the builder’s lender, RMC Mortgage, was denied, but Maronda is allowing us to use another lender, and the builder incentives will carry over.
I am currently in an active Chapter 13. We have verification letters from both the Trustee and our attorney stating that all required payments have been made for the last 15 months and that the account is in good standing. We also have Trustee approval to incur the new mortgage debt.
I recently had a 60-day late payment on a credit card during a death in our immediate family. This was an isolated situation during a difficult period, and I can provide a letter of explanation and supporting documentation if needed.
Because the home is already completed, timing is very important. I’m looking for a lender experienced with FHA loans during an active Chapter 13, manual underwriting, and borrowers with recent credit issues.
Would your team be willing to review our situation and determine whether there is a path to approval?
Thank you,
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1 Reply
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During the mortgage process, the mortgage underwriter will want a letter of explanation for derogatory credit tradelines. LOX does not need to be lengthy. Letter of Explanation should be brief, to the point, and accompanied by supporting documents.
Letter of Explanation: OpenSky Secured Credit Card Late Payment
Borrower: John Doe
Property Address: 123 Main Street
Loan Number: OPENSKYSECUREDCARDVISA
Date: September 11, 2026To Whom It May Concern:
I want to explain what happened that caused a recent late payment on my OpenSky secured credit card.
I opened the OpenSky secured credit card in May 2026 to build my credit, not because I needed extra funds. I planned to use the card responsibly and create a strong payment history as I prepared to buy a home.
To make sure payments were on time, I set up automatic payments from my bank account with my debit card.
After I lost my debit card, I asked my bank to cancel it and send a replacement. I updated my payment information with the credit card company right away so automatic payments would continue.
However, the automatic payment did not go through because it was still connected to the canceled card. I did not realize the payment had failed.
I only found out about the problem when I was told during the mortgage process that a late payment had been reported.
As soon as I was notified, I quickly looked into the issue and worked to fix the problem with my account.
This late payment did not happen because I could not pay. My bank statements from that time show I had enough money, and I can provide them as proof.
I can alI can also share documents about the lost and replaced debit card, as well as the police report I filed. Because I am following a Chapter 13 repayment plan and preparing to buy a home, I have been careful with my finances. My Chapter 13 repayment plan is in good standing, and I have made all required Trustee payments on time. I can provide documents from my Trustee and bankruptcy lawyer to confirm my payment history and current status. The OpenSky late payment was a one-time mistake caused by the debit card replacement and the automatic payment problem. It was not because I lacked money, had too much debt, or meant to miss a payment. Since then, I have started regularly checking payments myself rather than relying solely on automatic payments.
I respectfully ask the underwriter to consider the reasons for this late payment, along with the documents demonstrating that I had sufficient funds and have complied with my Chapter 13 payment plan.
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