I've always heard that "bankruptcy" alone is not a good reason for loan denial. Is this still the case or anyone else heard this in the past?

We will use 'bankruptcy' as a reason for loan denial if that is the reason that we get from loan product advisor from Freddie Mac.

If it's written in your loan policy and applied equally to everyone with no exceptions, I don't see a problem. My bank's policy is that if the bankruptcy is "x" years old and there has been no derogatory credit during those years, then the loan can be made. But the score still has to measure up which means that derogatory credit before the bankruptcy is still considered.