with a Bk and Foreclosure

[StartingOver08]

The correct answer is: You surrendered your home in bankruptcy. The foreclosure action is a necessary legal action that the bank must undertake to protect their interests in the property. You are not hiding a foreclosure, but you must understand that the foreclosure action really has nothing to do with you per se once you have surrendered the home. That is the proper way to explain it to your loan officer. Believe me, the loan officer will be asking for all kinds of explanations and they will request a copy of your BK petition and it will be clearly marked on the petition.

You need to keep a copy of the petition for at least the entire 10 years that BK is on your record to provide to the lenders just for that reason.

[newimges]

That's what I was thinking.

Thanks for your replies!

[dp1969]

That's what I have read and what I don't understand.

Since our mortgage was discharged with the bankruptcy - I assumed that the foreclosure afterwards wouldn't affect our ability to buy a house after the 2 year waiting period from discharge. We didn't have an FHA loan on our mortgage - it was a conventional loan through CountryWide.

I realize that the foreclosure can not be reported on our credit reports but I am concerned that we may have to wait the 3 year period for a new FHA home loan. I am wondering how a lender would even know about the foreclosure since it wouldn't appear on the credit report. Nobody seems to be clear about this.

When you are saying that a mortgage is "discharged" in the BK, are you referring to a surrender in the filing? We filed and surrendered our home in BK last year. If this the case, why won't it show on a credit report as a foreclosure? I thought we were to surrender just to show we hadn't any equity to sell it and possibly repay creditors. I've been lagging on pulling my credit reports but now I'm planning on it.

[StartingOver08]

When you are saying that a mortgage is "discharged" in the BK, are you referring to a surrender in the filing? We filed and surrendered our home in BK last year. If this the case, why won't it show on a credit report as a foreclosure? I thought we were to surrender just to show we hadn't any equity to sell it and possibly repay creditors. I've been lagging on pulling my credit reports but now I'm planning on it.

When you surrender the house in BK, the TL is supposed to read IIB and zero balance. Your history prior to the BK may or may not show, but the "history" after the filing definately does NOT show. If it does, correct your report. So if you have a foreclosure after BK, the BK shows and not the foreclosure.

[dp1969]

When you surrender the house in BK, the TL is supposed to read IIB and zero balance. Your history prior to the BK may or may not show, but the "history" after the filing definately does NOT show. If it does, correct your report. So if you have a foreclosure after BK, the BK shows and not the foreclosure.

Ok, that's actually good news to hear. We were never late on any payments (both cc's and house) but stopped paying all two months before filing. Like I said, I've convinced my husband to pull our reports, tonight. Which is the best way to obtain all three reports? What exactly should we be looking for on these?

[StartingOver08]

Pull each of your reports separately, not the 3-way merged report. You can get a free report for each CRA at www.annualcreditreport.com

Look at each TL to make sure it is accurate. The ones that have been included in BK need to say: IIB and zero balance. History before the filing is ok, history after the filing is not.

Look at all of your other TL's too to make sure the account reads accurately. For example, check the cr limits, status etc. Anything that is not exactly accurate needs to be challenged. Most reports have at least one error and usually more.

[dp1969]

Thanks so much...we will pull them.

[jribe]

Is it possible to eventually get a house? BK closed on May 08 we have since decided to most likeley let house go into foreclosure. Does anyone have any ideas how difficult it will be to get a mortage in 2 to 3 years if we have a 10% deposit and worked on getting credit score up?

i work in banking; and as others have said there is a definite "credit crunch" and even people with 800 fico's are having a hard time borrowing money (and i have seen this personally).

With both a BK and foreclosure you'll most likely need to have *at least* the conventional 20% down. But many people are coming with with 30-40% down.

Lenders are looking for safe borrowers, and the more money you put down, the more you are invested in the property, and the more likely it is that you will continue to pay the mortgage.

Start rebuilding your credit early- most lenders also want to see 3-6 tradelines open, active and with good history and stable 2 year employment.

Good luck

[newimges]

Thanks for the replies. We currently have 20% to put down on a home and are going to apply in the next 30 days or so which will put us over the 1 year mark of Chapter 7 discharge but I have read that with FHA and a good reason for bankruptcy - they may approve 1 year after discharge. Not sure if we will get approved or not but it's worth a shot.

Since the bankruptcy - we have no debts so our DTI is at 2% and we are looking at payments including insurance and taxes at about 22% of our net income. I definitely don't want to end up in the same situation again. If anything - I plan on learning from past mistakes.

I'll keep you posted.

[taylorkr84]

OK,

I just went through this literally a day ago. I don't know what kind of mortgage you had, but I had a FHA loan previously. I filed bankruptcy before my home went into foreclosure and my credit report shows only (INCLUDED IN CHAPTER 7). No foreclosure. However.....Unfortunately that does not mean anything. I just got done actually applying for a FHA loan through a lender and my credit and income was more than perfect to get a FHA loan. But the problem is FHA is just exactly like a insurance company. They don't care how you lost the home. They record in their records a claim against you that the bank filed for to get their lost money back. And your three years do not start until the date that the claim was PAID. In most cases that is not until right around when someone else actually purchases the property. In my case I filed chapter 7 in 4/06. Discharged in 8/06. The deed went to the public trustee in 9/06. But the house was not sold until 3/07. FHA sent a date of CLAIM PAID on 3/17/2007 to my lender. So I can not get a FHA loan again until 3/17/2010! So that's what I have to deal with. And with conventional loans its even worse, requiring you to be 4-5 years out. And on top of all of that, all the banks have to do is look you up in the county records that your home was in, and they will be able to see that your home was foreclosed on. My suggestion to you is to look up your county records on the property you foreclosed on and see when it sold after you surrendered it. The change of deed is all public information. Whatever that date is figure 3 years from then. I fell your pain and im sorry I don't have better news.
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[newimges]

We didn't have an FHA loan - our loan was conventional.

I called the credit union yesterday and gave them our scenerio. He asked if the foreclosure shows up on our credit report and I told him it does not. He said with at least a 20% down payment (some of the homes we are looking at - we can possible put down closer to 30% down), our DTI and current credit scores - we had a good chance of being approved. We are going to go in and talk to them on Monday and officially fill out the application.

I contacted several banks and brokers throughout this past week and most told me there wasn't a chance until 2 years after the bankruptcy discharge. A couple said maybe.

My MIL is willing to co-sign if we need her to but we are tying to get approved on our own first. We'll see what happens.

Thanks for all your help and replies. I've learned so much on this forum and continue to learn more everytime I visit. It's a great resource!

[deepend]

what happened?

I'm just curious what the CU said when you went in to speak with them about a mortgage approval? I hope the news was good!

[Trixie007]

However, two things...

First, a foreclosure can be a public record, which can appear on your credit report. This would not be stopped by the discharge of the mortgage?

Second, the mortgage application will ask if you have ever had a house foreclosed on. You would need to answer yes to that, as it would be fraud to lie. Something tells me that loan fraud will be looked at a bit more seriously in the future...

First, if the mortgage is included in the bankruptcy, at the time it is reportable it is IIB, not foreclosure. And... since it is IIB, no future deragatories reported.

Second, if it's IIB, then technically there was no foreclosure, but a surrender? Hmmm... hopefully someone in the know will chime in.

Personally, I hope my credit is so extremely trashed that no one will give me credit ever again... or will require a 50% down payment on a home, 75% down for autos.

[hereforinfo]

Second, if it's IIB, then technically there was no foreclosure, but a surrender?

Regardless of what is listed for that account on the credit report, there technically IS a foreclosure and it's public record.

[dp1969]

Personally, I hope my credit is so extremely trashed that no one will give me credit ever again... or will require a 50% down payment on a home, 75% down for autos.

Ok, Trixie...that was hilarious!