Please give me your opinions...

[bkdone]

Hi everyone...it's 'bkdone' here. I live in AZ and we are having MAJOR foreclosures and housing issues here. The big-hitter First Magnus was based out of Tucson, and went belly-up about 6 month ago. Not a good housing picture here.

Here is a bit of background on my situation... My DH and I have stable employment, earn about $80K a year total. We have no dependents, and our cars are paid off. We filed for Ch. 13 in March 2004 and due to a refinance, we paid off our plan early and were discharged in September 2006.

Let me explain that we filed BK because I was having some depression issues. My DH and I were going thru some things, and since I was the bill payer...nothing got paid. We had the money to pay our bills, but just getting out of bed and going to work was about all I could muster up the motivation to do. Ch. 13 was actually a God-send since I only had 1 bill to worry about each month, besides our mortgage.

Since our discharge, I have been making my mortage payments on time (except for one that they said was 30 days late...I am disputing that already!!!) and I've opened 3 new credit cards with a total of $4500 open to buy. We have been using the cards and making our payments. My plan is to have the balances near $25 on each card by the end of July....and hold them there.

I have already been disputing EVERYTHING on my credit report. Most of the tradelines did not show the disharge and several showed balances owing and due...

Prior to the corrections my FAKO scores were 600, 612, and 625. I pulled one FICO just to compare and it said 585. So now, alot of the corrections have been made and I'm getting updated reports and email alerts on a daily basis showing the changes. I'm anxious to see what the updated scores will be, and how they will change over the next few months. I'm right to anticipate that they will go up, yes?

Everything is looking correct, except Experian's entire report is showing 'Ch 7' instead of 'Ch. 13'. I plan to call them tomorrow since I have already sent them a copy of my discharge which clearly shows Ch. 13.

Now...I WANT A NEW HOUSE! I am trying not to get emotionally hung up on the 'wants' but I really feel that I'd have a good chance since the housing market here is very depressed and I would be 2+ years out of BK when we apply.

Our current house has to sell, which we plan to put on the market this September or October. Our house is completely updated, and despite the downward sales, our subdivison still does pretty well.

The lot we want in the new subdivion wont be available for at least another 9 months, which puts us at the beginning of 2009. It would be at that time we'd actually be contracting for the house, and then factor another 5 monts or so to build.

The new house we found is $237K (about $60K more than our current mortgage.) With our equity and savings, we'd be able to up down about $15K. Its a new subdivision and the builder's lender is Wells Fargo...who just happens to be our lender right now. The builder is offering up to $19K in incentives right now to be used toward upgrades, lot premiums, etc...

Part of me says I should just be grateful that I already have a house, and leave it at that. But the other side of me says I should try to go for the new place since I could likely get a FHA loan.

Many of you have been thru this, and in your opinions...what should I do? Good or bad...I appreciate the help. I've been trying to ask myself all of the 'what if' questions...'worse case scenarios' and I still am coming up with "its possible."

Please comment.

[Flamingo]

The important thing is that you keep any payments to any bills you have after your discharge on time - none late. Clean up your credit reports although I know how frustrating that can be and we have also been through the Chapter 13 to Chapter 7 switch by varoius creditors on our reports; I truly believe people that input information in your CRAs just hit keys and do not look. You will have a Chapter 13 on your credit reports for 7 years after your filing date in 2004 so for anything mortgage related, you can bet an FHA loan is the best way; you may not be able to get a conventional and if you can, the rate will be much higher. With FHA you still will have to deal with monthly PMI. What you will need to do first is sell your house. In the interim, you can investigate your options as to what you think you might get on the sale of your home and what you can put toward a new one. Now is not the time to go overboard; make sure it is something in the range you can afford and can still afford in the years to come. Start talking to some brokers and real estate folks to educate yourself. You need to also make sure that if you are dealing with circumstances as to your health and not making payments that there is a backup to that if you should relapse. Have your husband work on the bills with you so nothing is late and falls in the cracks. Best of luck to you and I hope you are able to get something you like and will enjoy!

[bkdone]

Thanks for the response. You have reaffirmed the thoughts and ideas that I was having, but when I "fell in love" with the new house, I started doubting my own reasoning.

One thing that I did was is to set up all of our bills on automatic payment, so that I dont actually have to mail anything out or do anything manually. With the Ch.13, I got so used to living broke and not wanting or wishing for anything new, that the idea of actually pursuing a new house seems surreal!

Once we sell this house, which will be September or October, then we will move into a rental while we wait for the lot we want to open up. We knew it would be a headache to move twice, but for me, it will be much simpler and less stressful so that I dont have the worry of trying to sell one while we are trying to get another. I'm all about minimizing the stress!!!

Thanks and keep the comments coming!

[spectria]

I wish I had seen this post before I answered the other one about Wells Fargo. You will find a solid reputable mortgage company, just not WF.

I don't want to be part of you getting down, as I suffer from this as well But...

Unless it is your last dying breath, do no business with Wells Fargo Mortgage.

Asc is who you will be dealing with if you ever have a problem with WF

ASC never negotiates with anyone, and they make it impossible to communicate directly with WF to get any results.

ASC is a major offender of HUD rules to make good faith efforts to renegotiate loans as an alternative to foreclosure.

ASC hires nearly illiterate collection agency types who want nothing but the money.

They are brutal and abusive, you don't need to ask how I know...

[bkdone]

Thanks for the post. Please dont worry about my mental health...I'm good. Let me just clarify for the record, I wasnt diagnosed with depression, we just went thru a very devestating time. It was a a bad time...something we'd never experienced before. I dont want to take anything away from the seriousness of those people who really suffer from clinical depression.

With that said, I appreciate the info on WF Mortgage. I hope that things go smoothly, but I am not committed to WFM. I am going to use whomever comes with the best deal and the best fit for us. I have read some drama with WF, but so far they have been decent to me. But with this new deal...we'll just have to see.

[movingon]

A couple things:

1. Do you need to move due to job, current home money pit, or do you just want to move cause you fell in love with the new home? If its you just want a new home, that's negative #1. If you have other reasons, then scratch this point.

2. You only have 15K to 20K for downpayment. Does that include realtor fees for selling your current home? That is not much for a $280K and above home. How much of that will you need for moving costs? Setting up new cable, utilities, etc? Moving is always expensive...

3. Your fico scores are sub 600...that will not get you anything close to prime for your next loan. It takes time and work to get scores up...680-720 should be a goal for your middle score. I wouldn't even risk a inquiry on your credit report unless middle score was 680 +.

4. Phoenix is dangerous now for all home buyers/sellers. Its hard NOT to to see on web pages and newspapers that Phoenix and S. Cal are two of the spots to stay away from. I heard an article that certain lenders won't lend a dime in these areas unless you have 20% down.

5. Wells Fargo is the devil.

Just some thoughts. If you have to move, then we'll give you some pointers how to bring scores up and be prepared...it this is just a wild hair, remember, you went BK and probably never want to get in that situation again. Be very cautious.

Good luck.

[bkdone]

A couple things:

1. Do you need to move due to job, current home money pit, or do you just want to move cause you fell in love with the new home? If its you just want a new home, that's negative #1. If you have other reasons, then scratch this point.

2. You only have 15K to 20K for downpayment. Does that include realtor fees for selling your current home? That is not much for a $280K and above home. How much of that will you need for moving costs? Setting up new cable, utilities, etc? Moving is always expensive...

3. Your fico scores are sub 600...that will not get you anything close to prime for your next loan. It takes time and work to get scores up...680-720 should be a goal for your middle score. I wouldn't even risk a inquiry on your credit report unless middle score was 680 +.

4. Phoenix is dangerous now for all home buyers/sellers. Its hard NOT to to see on web pages and newspapers that Phoenix and S. Cal are two of the spots to stay away from. I heard an article that certain lenders won't lend a dime in these areas unless you have 20% down.

5. Wells Fargo is the devil.

Just some thoughts. If you have to move, then we'll give you some pointers how to bring scores up and be prepared...it this is just a wild hair, remember, you went BK and probably never want to get in that situation again. Be very cautious.

Good luck.

The answers are:

1) No, we dont need a new house but we want a new house. We've been in this one for 12 years and its a starter home. I could stay here if necessary, but I'd like to move. I'm not 100% committed to it...just seeing if its possible.

2) The $15K to $20K I have will be after we sell the house and pay all of the realtors' commissions, etc... This is the amount we will have for a down payment.

3) The scores are low, I agree. But, those were before all of the corrections and we had alot of errors. Most (about 90%) have been fixed as of just a few days ago, and the other disputes are still pending. I dont know how much a correction the FICOs will be, and the nice thing is that we wont be contracting for the new place for approx. 12 months or so... That will give the scores more time to go up. The lot we want isnt available for awhile, at least 6-9 months. New house is $237K, not $280K. After our down payment, we'd finance about $222K.

4) I llive in Southern AZ...Tucson, which is 2 hrs south of Phoenix. Our county is not one of the zipcodes blacklisted.

So now what do you think? And please tell me why you think that WF is the devil!!

[movingon]

Tuscon is a different story. You should be able to get a nice home for $230K...(I used to live in Chandler 1991-2001)

Sorry for my mistakes...sounds like you have your ducks in a row. 10% is not bad for downpayment. ALso, time is on your side, so save thousands by waiting until your middle score is decent. If you know WF will be your lendor, maybe ask them what score you need for a competative rate. That way you'll know what number to shoot for.

Going to myfico.com and visiting the forums will give you a tons of info how to improve your scores (if you need assitance). Good luck on that!

PS: If WF gives you a nice rate, then it doesn't matter what experiences other people had.

[krielly]

BKDone, we also have WF as our mortgage company. We are currently in the middle of our 13.
I have a question, which is a bit off your topic, so I hope you don't mind........

How did WF report during your 13. How are they reporting now, since discharge? Did you have to dispute anything they reported? If so, how did you do so, and was it resolved satisfactorily?

Just asking because it appears the 3 Credit Bureau's all have something different for WF on our reports.

We make our payments outside of the plan.......not sure if you did that as well or not?

thanks
K

PS: Good luck to you on getting those scores up and getting into the new home! Sounds like you are recovering nicely from your 13! Great job!!!!!!!!

[bkdone]

BKDone, we also have WF as our mortgage company. We are currently in the middle of our 13.
I have a question, which is a bit off your topic, so I hope you don't mind........

How did WF report during your 13. How are they reporting now, since discharge? Did you have to dispute anything they reported? If so, how did you do so, and was it resolved satisfactorily?

Just asking because it appears the 3 Credit Bureau's all have something different for WF on our reports.

We make our payments outside of the plan.......not sure if you did that as well or not?

thanks
K

PS: Good luck to you on getting those scores up and getting into the new home! Sounds like you are recovering nicely from your 13! Great job!!!!!!!!

No problem...

During our CH.13 we had Countrywide, but we used some of the equity in our house to refinance out of BK, and pay off our plan early. The trustee in our case was appauled by the ripoff rates that Countrywide was offering us for the refinance. They objected to the refi and the Judge made us "shop around" for a better deal. WF came thru with a great deal and Countrywide said that they could not match it. He actually told me to "go for it" with WF. WF took over in July 2006 and we've had them ever since. We paid our mortgage outside of our plan.

WF has reported correctly each month (except once) to 2 of the 3 bureaus. They were not reporting to Experian at all until I wrote them a letter and asked them to.

I know alot of people have had nightmares with WF, but honestly...I have not. The only problem I've had so far is that they did report me late 30+ days last August, which I didnt feel was correct or fair. I disputed it and the results are pending...

Basically, I did an online payment and WF 'rejected' it twice. I didnt realize the payment had been rejected until the next month when the new statement came in. It said I was in default because I had not paid my prior months' mortgage. I had the receipt where I had initiated the online payment, but sure enough, the money was still in my account.

The customer service rep said it had been rejected due to NSF. I faxed over proof the money was there and had been there the entire time. Then they came back and said that I had input my account information wrong... I checked...account number and routing # correctly entered. Then they said my name was incorrect... WHAT? Well... I have a hypenated last name. Evidently their computer didnt like that and rejected the payment. How is that MY fault?

So...I have explained all of that in a happy little letter to WF and we'll see what they say. I sent them copies of everything to back up my story. I also learned a valuable lesson in that I check each time I make a payment with anyone...check a day or 2 later and make sure its gone thru!!!

[krielly]

So once you asked them to report to Experian, they did? That's good news. Who did you address your letter to?

[bkdone]

So once you asked them to report to Experian, they did? That's good news. Who did you address your letter to?

I mailed it to the coorespondence address of:

Home Mortgage
Wells Fargo Home Mortgage
P.O. Box 10335
Des Moines, IA 50306-0335


Good luckk!

[CindyLou]

Hi! I just wanted to give my opinion, so hopefully you dont' mind First of all, if you don't NEED a new house, then stay put! Adding $80,000 to your debt after just coming out of a chapter 13 just doesn't make much sense if you don't have to.

If you don't mind me asking....have you started saving for retirement? You could be 21 or 51....but it is something to think about. How about taking the extra $700+ you will be paying in P&I, Taxes, and PMI...and put that into an IRA or 401K?

You are in such a BEAUTIFUL "place" of not having debt...so why dig yourself back into a hole?

Also, eventually you will need new cars....they don't last forever What about saving for a new car down the line.

Now, I wouldn't be saying all this if you were currently renting or needed a larger house to fit a big family, or needed to relocate for work, etc.....but there just doesn't seem to be a good reason and from your posts, I can see that deep down inside you know that.

What ever you decided, good luck. I know its hard to not just fall in love with a house! We have recently decided to hold off buying even though we are still renting.

[bkdone]

Thanks for that...I asked for everyone's opinion! I appreciate your thoughts. Ultimately I know that we will have to decide this for ourselves, but I'm going crazy thinking about it.

Being 2 yrs out of Ch.13 still is amazing to me, and we have stayed out of serious debt. We each have retirement plans thru our employers, and we also have a personal retirement account that we pay into each payday. Retirement is covered, and despite what they say, the CH.13 didnt touch it...we never had to surrender our optional retirement account.

I know that I dont 'need' this house, but I'm so conflicted since the deal seems to get sweeter each day. I spoke to the mortgage guy and the builder rep today. Interest rate on the house will be 5.75% fixed over 30 years. Base price of the house is $237K, but I can use the offered incentives of $16K to reduce the price of the house. With my $15K down, the amount I finance is roughly $208K. The builder is giving me an extra $2K for using their lender, which is already my current lender... I can use this as down payment money or toward closing costs...plus an additional 0.05% reduction on the closing costs.

Just seems too good to be true. My head is spinning! See why I'm asking for everyone's opinion?