Almost 2yrs since discharge but....

[Discharged09]

I had a condo that I had included in my Chp 7 and the bank has done nothing with it. This October will be my 2yr since discharge date and I'm looking at trying to buy a place. Is the bank going to approve a mortgage for me with my name still being attached to that condo? On my credit report it says I have a 0 balance for the property and says nothing about a foreclosure. I know that similar questions have been asked and some people have said it takes 3yrs from the time the property comes out of your name...so if that's the case, I would have to wait 5yrs since my discharge date? (if condo was taken out of my name today?) I talked to a broker a few months back and explained to him my situation and all he told me was that i was good to go 2yrs after discharge for FHA. He said the condo that was included wasn't a problem. This is why I'm a little confused...can anyone shed some light? Thanks in advance!

[sick of debt]

It is absolutely 3 years after a foreclosure with an FHA...I am going through the process right now. My 2 yr discharge was Dec 10, however, my 3 yr foreclosure date will be this October.

[concernedone]

question

It is absolutely 3 years after a foreclosure with an FHA...I am going through the process right now. My 2 yr discharge was Dec 10, however, my 3 yr foreclosure date will be this October.

Hi, I have a question. Did the foreclosure appear on your credit report after it was finalized? Please let me know. Thanks.

[dp1969]

Hi, I have a question. Did the foreclosure appear on your credit report after it was finalized? Please let me know. Thanks.

Ours did not appear on the credit report, only as "included in BK" but do not think it wont be an issue when applying if the lender doesn't see it. We have signed docs, paid the down payment/closing costs and 2 days later, the loan would not fund because the lender DU wanted to know what happened to the house. Go to the county recorders office and print up the Trustee Sale paper and keep it to show the lender. Going through this right now and might lose our house we are buying.

[jmanford]

Go to the county recorders office and print up the Trustee Sale paper and keep it to show the lender. Going through this right now and might lose our house we are buying.

How does getting a copies of this paper work remedy your situation? Just want to know. Could possibly be facing the same situation myself.

[dp1969]

You need to prove to your lender that in the state of California, the Trustee sale is considered (by most) to be the actual day the property is transferred to another party. In our situation, our lender had already obtained the "official recorded date" of the sale and is using that as the 3 year mark. It was recorded a whole month after the Trustee sale and so they cancelled our contract. But, they are allowing us to submit another offer and we start a 45 day again. We've waited since April to purchase this property and the seller is agreeing to wait another 45 days so we can pass our 3 year mark. Really a lucky situation for us but don't get caught in what your lender considers to be the waiting period. Our broker is well versed in dealing with FHA loans and the BK/foreclosure process but with the foreclosure not showing up on the credit report, it wasn't a red flag...not until the lender asked for our whole BK paperwork (not just the discharge papers) and they saw the home being "IIB". I think the real estate lending requirements are going to be changed (again) soon...now that people who lost homes in the last 3-4 are coming up to be able to find another home again they will tighten the requirements for not just including the discharge papers but the whole filling. Good Luck!

[HHM]

Hi, I have a question. Did the foreclosure appear on your credit report after it was finalized? Please let me know. Thanks.

Doesn't matter if it does, or does not appear. The foreclosure is discovered by the underwritting department by researching the disposition of your prior residences (i.e. what happened).

[jmanford]

You need to prove to your lender that in the state of California, the Trustee sale is considered (by most) to be the actual day the property is transferred to another party. In our situation, our lender had already obtained the "official recorded date" of the sale and is using that as the 3 year mark. It was recorded a whole month after the Trustee sale and so they cancelled our contract. But, they are allowing us to submit another offer and we start a 45 day again. We've waited since April to purchase this property and the seller is agreeing to wait another 45 days so we can pass our 3 year mark. Really a lucky situation for us but don't get caught in what your lender considers to be the waiting period. Our broker is well versed in dealing with FHA loans and the BK/foreclosure process but with the foreclosure not showing up on the credit report, it wasn't a red flag...not until the lender asked for our whole BK paperwork (not just the discharge papers) and they saw the home being "IIB". I think the real estate lending requirements are going to be changed (again) soon...now that people who lost homes in the last 3-4 are coming up to be able to find another home again they will tighten the requirements for not just including the discharge papers but the whole filling. Good Luck!

Your case is like mine. Chapter 7 home was IIB. It didn't show up as a foreclosure. So are you saying you had to wait 3 years to apply for another loan?

[dp1969]

Yes but ours was unusual. We applied, pre-approved, made and offer and actually signed the docs at the title company. On the way home, got a call and found out the lender wanted our whole BK paperwork (50+ pages) and after review, didn't fund the loan. It's called the "funding conditions" that they reviewed and based their decision on the official recorded date, not the actual Trustee sale. Now, we have to wait until after October 16th to close (again). So to be safe, make sure you know what the lender chooses as the 3 year mark!

[jmanford]

What if you filed a Quit Claim Deed on the property at the County Recorders Office? My lawyer had me do this when my loans were discharged.

[dp1969]

You transferred it to another party? If you weren't going to reaffirm, why did your lawyer suggest that?

[jmanford]

I transferred it back to the bank. I had no financial interest in the property anymore and I didn't want to be liable for an damage or burglary or mishap while it was sitting vacant. It also afforded me the luxary of removing the homeowners insurance. I didn't want to have to keep paying the premiums on a home I no longer lived in. The lender denied 3 short sale offers that were made on the property. My way of saying go f uc k yourselves.

[HHM]

What if you filed a Quit Claim Deed on the property at the County Recorders Office? My lawyer had me do this when my loans were discharged.

If you quit claimed it back to the bank, not a valid transfer (unless the bank accepted it in an affirmative way). There is a difference between being able to "record" a document (like a quit claim) and the "legal validity" of that recording. I have seen this tactic discussed in several places, but if it was challenged, the quit claim would not hold up. And in your case, jmanford, if you quit claimed, you probably delayed your ability to get a new mortgage because you have created a more difficult process for the bank to foreclose.

[jmanford]

Well, not really. The house was sold 2 months after my quit claim at a trustee sale.

[dp1969]

It's unfortunate but HHM is right. My lawyer did not suggest that at all...we called the bank, told them the keys are in the mail, cancelled the insurance and moved out. But then again, we were not worried about damages, vandals and being liable if someone (or something) was to happen as we had no financial ability do pay out anything. Curious, have you looked at Zillow or MLS to see when the house sold or was re-sold? That would give you an idea on when the bank foreclosed but you really should go down to the recorders office to see. Going to cost about $15 but then you know when you can apply again.