AWACSMortgage compliance intelligence from Flightline

Newrez Correspondent · Correspondent Announcement 2026-093 · Published

Closed-End Second Lien Bankruptcy Seasoning Revisions

Newrez updated credit event underwriting guidelines for closed-end second mortgages. Borrowers with a completed Chapter 13 bankruptcy now qualify after two years from discharge rather than four years.

Review recommendedEffective Oct 22, 2026Checks passed· adjusted automaticallyRead the announcement ↗ (opens in a new tab)

Loan impact

Summarized from the announcement · needs review

Applies to: The updated bankruptcy seasoning criteria apply to closed-end second mortgage transactions.

Applies when all of these are true
  • ANDNewrez loan
  • ANDProduct is Closed End Second
Addressed to
Newrez LLC "Newrez" Approved Correspondent Clients
Investor
NewrezFrom the publisher, not quoted from the text
Affected area
Eligibility
Effective
Oct 22, 2026
Applicability confidence
Needs review: some rows could not be matched to a quote from the source

Summary by AWACS. Newrez Correspondent's guide is proprietary, so AWACS does not reproduce its text. Read the official announcement ↗ (opens in a new tab)

What changed

Summarized from the announcement
RequirementPreviouslyNow
Chapter 13 bankruptcy waiting periodRelaxedPreviously: A four-year seasoning timeframe was applied to all bankruptcy filings prior to the loan application.Borrowers with a discharged Chapter 13 bankruptcy require a two-year waiting period, while dismissed filings still require four years.
Chapter 7 and 11 bankruptcy seasoning calculationClarifiedPreviously: A four-year seasoning period was required from the date of application.A four-year waiting period is required, calculated from the discharge or dismissal date to the application date.
Multiple bankruptcy eligibilityClarifiedNew requirementBorrowers with more than one bankruptcy filing are ineligible.

What to do

AWACS interpretation · not source language

What to review: Review updated closed-end second mortgage guidelines permitting borrowers with a discharged Chapter 13 bankruptcy to qualify after two years instead of four, alongside clarifications on measuring four-year seasoning from discharge or dismissal dates for Chapter 7 and 11 filings and the ineligibility of borrowers with multiple bankruptcies.

QC implications

  • Sample closed-end second mortgage files involving prior bankruptcies to confirm that the shortened two-year seasoning period is applied exclusively to discharged Chapter 13 filings and that dismissed bankruptcies continue to observe four years.
  • Verify that Chapter 7 and Chapter 11 seasoning periods are correctly calculated from the discharge or dismissal date to the application date.
  • Confirm that closed-end second mortgage applications involving borrowers with more than one bankruptcy filing are identified as ineligible.

Source and record

Version 1 · archived

Checks

  • Source verified: Passed

    The document ID, link and publication date match the official source.

  • Quotes match the source: Passed

    Every quoted passage appears word for word in the official document.

  • Requirements backed by the source: Passed, adjusted automatically

    Anything marked required is backed by the requirement language and dates in the source.

    • A detail the source does not support was removed or adjusted

  • In scope: Passed

    The document is about residential mortgage lending.

  • Format and labels: Passed, adjusted automatically

    The record follows the AWACS format and uses its standard labels.

    • A detail the source does not support was removed or adjusted