House included in BK still considered foreclosed?

[sharksfan]

My guess would be your letter is garbage, but I wish you luck.

My gut says the same thing, unfortunately... one of those "if it's too good to be true" sorta things. He knows the entire situation with our BK'd house.

[Ugh07]

This particular topic is pretty confusing to a lot of LO's and even underwriters and while he may know the whole situation he likely doesnt realize the ramifications. I think its worth following through with though

[sharksfan]

This particular topic is pretty confusing to a lot of LO's and even underwriters and while he may know the whole situation he likely doesnt realize the ramifications. I think its worth following through with though

I started asking more questions. It's become clear that I'm being looked at has having ONLY a BK7 against me. My broker is now asking if I've received any notice that I'm actually in foreclosure (which I haven't)... and what my BK attorney said it will register as (foreclosure... but he was rather clueless on much of the credit reporting process for BK'd items. he also said my cars would show as repo'd, which they don't). My next concern is following through with this... and foreclosure proceedings starting/being uncovered the day before closing

If not on a credit report, at what point would a foreclosure be uncovered?

Seems to me that the FHA needs to publish guidelines involving cases where homes were surrendered in BK... I bet there are TONS of people in this situation.

[jonwh25]

Sharksfan,

It doesn't matter what your credit report says. They will find your foreclosure when they pull up the title to your house. As long as your name is still on the title then it goes 3 years from the date that title is transferred out of your name. I know this because this just happened to me. The only way you can get a loan is to have 20% down payment ready and then the credit unions will allow it. I just found out about the 20% down payment today. I'm thinking of taking my IRA worth 50k and using the 30k left after tax penalties for my down payment. It may wipe out my retirement, but I'm still young (34) so I can start my retirement over and finally own a home again.

[Ugh07]

Jon, Im glad to hear your credit union is willing to look at your deal with 20% down. I would stress though that not all credit unions would look at this loan as they all have their own guidelines In this case your credit union may be portfolioing the loan. keep us posted Jon

[Birn]

This is very interesting discussion. I want to make sure that we differentiate between FHA and Conventional financing. My LO at our local credit union told me that we could get a 30 year fixed mortgage at the credit union 4 years after discharge as long as the foreclosures were IIB (which they were). These are Fannie Mae guidelines. She explained that they use Fannie Mae guidelines since they sell off those mortgages in the secondary market.

Does this sound right? I sure hope so.

My credit union gave me a 15 year $300k mortgage loan that we closed on last week. My house cost $530k. I had to put down $230k. I'm 18 months out from my Ch 7 discharge. My plan is to get the home now and later refinance to a 30 year mortgage once I'm 4 years from discharge. That would be mid 2012 when I would refinance.

Any feedback from the experts on this board is welcome.

[dm415]

18 months out of 7 discharge and you had over 200,000 cash

[Birn]

18 months out of 7 discharge and you had over 200,000 cash

I live in Texas. My primary residence is exempt. I sold my home a year after my discharge. I had over $300k of equity in my house.

Could someone please respond to my question about FHA vs. conventional mortgages? I've never had an FHA or any govt. insured mortgage. If I refinance in a couple of years into another conventional loan, will they use 4 years from my discharge or 4 years from the sale date of the foreclosed rental homes I had? All the foreclosed mortgages were included in the BK.

My credit union LO says 4 years from discharge but after reading this thread I'm not sure.

Thanks

[Ugh07]

more often than not they will go from sale date. If your credit union says otherwise, then that is their guideline or the LO is wrong.

[js1980]

I started asking more questions. It's become clear that I'm being looked at has having ONLY a BK7 against me. My broker is now asking if I've received any notice that I'm actually in foreclosure (which I haven't)... and what my BK attorney said it will register as (foreclosure... but he was rather clueless on much of the credit reporting process for BK'd items. he also said my cars would show as repo'd, which they don't). My next concern is following through with this... and foreclosure proceedings starting/being uncovered the day before closing

If not on a credit report, at what point would a foreclosure be uncovered?

Seems to me that the FHA needs to publish guidelines involving cases where homes were surrendered in BK... I bet there are TONS of people in this situation.

What ended up happening with your loan? I got bit by this big time. I didn't know about the three year wait. I told the mortgage guy with the bank that I did a chapter 7 (disch 2/08) with the house and it was foreclosed in March of 09. He said there was no problem and issued me the approval letter. I found a property and signed a contract in order to get the $8k tax credit. Contract was signed 4/10/10. We were supposed to close on 5/10/10 (This coming Monday). Thursday (yes, THIS Thursday) he calls letting me know the loan is approved with contingencies. One of them is :

Need all BK paperwork, voluntary petition, and all schedules. They also need the paperwork for my Divorce in 2007. Seriously? Two days before closing? I send it all in to them Friday AM. At around 3:00PM the mortgage e-mails me and says they are going to decline because my house was in the BK. So, to answer your question, they inferred that there was a foreclosure due to the home loan being discharged in BK.

So, here I am with a purchase contract expiring on Monday. The good news is that I should get my earnest money back. The bad news is that I've wasted $800 on an appraisal and home inspection, as well as the seller's time. I'm pretty pissed that the mortgage company would tell me I'm declined the day before closing... Grrrr....

[sharksfan]

What ended up happening with your loan?

Nothing. We decided to look into a lease-to-own/private mortgage setup (still looking at our options).

What you described going through is exactly how my nightmares were playing out These didn't stop until the final decision was made to pass on this and look at other options.

[HHM]

Is the 15 year mortgage a balloon, if not, why bother refi at all. Just payoff the mortgage over the 15 years, you will save a ton of money vs refi'ng into a 30 year.

[geye]

So..someone touched on this earlier in the thread but I didn't see it answered..

If you file for bankruptcy, but don't re-affirm the mortgage (retain and pay or something like that) , will you be eligible for a new loan 2 years after discharge?

If so, it would be best to not re-affirm my house, but keep paying on it so they don't initiate foreclosure. Would I be able to qualify for a new home at the 2-year point? Or would I not qualify because the title of the original home is still in my name? Because if I could qualify at that point, I could quit paying on my first home as soon as I've closed on the second, and not be liable for the deficiencies. Once I've bought my new home it won't matter if a foreclosure hits my record.

FWIW, our broker tells us that if we don't re-affirm the mortgage in the bankruptcy, it will be 2 years from discharge. But I'm unclear on whether we need to sell first or not.
If we were to re-affirm the mortgage but then later lose the house, then it would be 3 years from the foreclosure.

[sharksfan]

If you file for bankruptcy, but don't re-affirm the mortgage (retain and pay or something like that) , will you be eligible for a new loan 2 years after discharge?

Per the mortgage broker I was dealing with after asking the right questions:
The lender has to foreclose on the house to take it out of your name. This will count against you as a foreclosure. The 3 year clock starts on the date your name gets taken off the deed.

In my case I'm 23 months post BK discharge... house is still in my name.

(recently discovered the house has an auction date of 6/3 )

[geye]

Per the mortgage broker I was dealing with after asking the right questions:
The lender has to foreclose on the house to take it out of your name. This will count against you as a foreclosure. The 3 year clock starts on the date your name gets taken off the deed.

In my case I'm 23 months post BK discharge... house is still in my name.

(recently discovered the house has an auction date of 6/3 )

So...after posting that question, I asked my attorney. He said that we could stay and pay until we're ready to move (but after that 2-3 year mark due to the bankruptcy), and then go buy a new house before this one actually forecloses. So that would be a bit different than your situation, in which you are letting the house go before buying a new one.

But then he also said to let him know if we find out otherwise

So I'm not sure what's going to happen