Mortgage after foreclosure...

[LoveBubble5]

If anyone has been in this situation, please tell me what happened in your sitch. I've gotten so many vague answers, but nobody I've talked to has actually gone through anything like this.

I closed on my house in January 2005. I filed BK in 7/10, discharged in 10/10. My intentions were to reaffirm my one and only mortgage, I went on record stating so, but my lawyer dropped the ball by not following through with the paperwork (says his records indicate the forms were mailed to me but there's no records showing I returned them- his word against mine. I never got them). I assumed since I've been paying that it has automatically been reaffirmed. I have learned a LOT in these past six months.

I owe about $109k still, the city assessed my home at $128k, I have not had my house appraised yet. All the articles I've read indicate that assessments, appraisals, ect. mean absolutely nothing when trying to sell a home. What matters is how much a buyer is willing to pay (within reason of course). A real estate online states my house is worth about $115k.

Based on articles I've found concerning this, I don't believe my house will sell for any of the above numbers. My reasoning is this: The house next door is smaller than mine and prior to foundation fixings, it sold for $116k in 2006. After the foundation was fixed, it sold for $169k six months later. After the new owners moved in they did more fixings (siding, interior, ect.) The owners just had the house looked at this year for the possibility of selling, and was told they absolutely cannot list it any higher than $139k- which means they will take a HUGE hit.

I have also researched what houses in my neighborhood have sold for, and for homes the same size as mine and in great condition, they're selling for $130-$140k.

My house has a HUGE crack in the foundation which will probably cost around $20k to fix. It is a ranch-style, and the main level rooms are ok but could use some cosmetic help. There are stains on the ceilings from a leaky roof, though we did a complete tear off in May 2009. Although there is no more water leaking in (it had been coming in through the ceiling fan), there are some unexplainable water stains slowly forming again in the ceiling. There has been mold in my home, and at this moment the basement is leaky. Prior to buying a new sump pump, the basement would flood ankle deep anytime it rained. Now it is just damp with one puddle at the lowest area.

We are planning to move in the future anyway, we'll just have to move sooner than planned. I do not have the money to fix the foundation or anything else that may need repairs. If for some stroke of miracle someone were to approve me for a $20k+ loan to fix the basement, that would put the overall loan still higher than what the house will probably sell for.

Now, this is where I'm wondering. I mean, whatever happens happens, and I'll just deal with it as it comes. I'm just wondering if there's any other smart way or order to do things in... such as, do I move before the foreclosure, do I fix anything at all, do I accept free weatherization, ect.

I've spoken (online) with lawyers who've advised that I stay in my home and save what I would be paying in monthly payments so that I have something to put toward future housing. I've also spoken with licensed real estate agents (in person) who have made the same suggestion, to stay put until I get kicked out and save my money. Quite frankly, I can't believe that this is the overall advice.

Now, I stop making payments and wait until just before the six month redemption period is over... OR, do I stay in the house until I get kicked out by whoever buys the house at the sheriff's sale? I've read articles where it has been advised that I stay in my house (so to keep it up) until after it is actually sold on the market, that banks actually prefer I stay in my home to keep it up.

My other concern is this: My credit report states that my mortgage was discharged in my BK. When the time comes for the actual foreclosure, I assume that will also show on my credit report (as well as in the online viewable circuit court dockets). Once the house is foreclosed on, will that also show on my credit as "included in the bankruptcy"?

I'm also wondering about the timeline to buy another home. The overall literature I've found states a minimum of 3 years before I can even attempt to get another mortgage after BK. But what about foreclosure? Does that timeline start all over again once the foreclosure is done and over with? Or does it revert back to when I filed BK? I am so confused about this in particular, which is why I'm curious to see if there's anyone else here who's gone through something very similar to this.

[tobee43]

it's tons to think about i know!

first things first. sounds like you really do want to leave since all the problems. you lucked out by NOT reaffirming the mortgage! now you can walk away without the worrying of having signed on with the bank to make the payments.

Wisconsin is a Judicial state, which means your foreclosure has to go thought the court systems. usually this takes quite some time. (our property was in nj and it's been close to 4 years now and the bank still hasn't foreclosed), so actually we could have stayed this entire time rent free! we choice not to, however, we stayed as long as it took to save enough money to make the move. we ended up leaving the state completed which the best thing we could have ever done.

once the house is foreclosed on, and it's AFTER a chapter 7 where the mortgage was included in the bk, it could or could not show up on your credit report. the problem is, many of the banks are not foreclosing and your chances of getting another mortgage begins AFTER your foreclosure takes place, and many have said FHA and other lenders require 3 years AFTER the foreclosure NOT the closing and discharge of your bk.

don't really worry about whether the foreclosure shows up on your credit report, because your bk stays on your credit report for 10 years while a foreclosure is 7 years...so either way it's there on way or another.

we did purchase another home, however, went owner financing, 100%....and had no problems.

i would stay as long as possible and just keep saving and saving and saving!! you don't need to know or care who buys the house??? i really don't understand why you would. also it sounds like the house has some serious issues, that one might one to get behind them asap, so you don't incur any more costs. i certainly would not put a dime in the house other than to maintain what you need to reside comfortably until you decide to leave.

i would also check your county sheriff's site (most have them) and they list the foreclosures so you can see how quickly they are moving in your area. some area's move faster than others, however, since you state is a Judicial state you can even go into court and get an intention if need be.

best of luck to you! and make certain you keep us all informed on how your doing.

[jmanford]

" My credit report states that my mortgage was discharged in my BK. " Mine does as well.

When the time comes for the actual foreclosure, I assume that will also show on my credit report (as well as in the online viewable circuit court dockets). Once the house is foreclosed on, will that also show on my credit as "included in the bankruptcy"?

My foreclosure doesn't show on my credit report. But, that is irrelevent. When a lender does a query on public records before he pre-approves you for a loan, your foreclosure will show up. They will find it. The waiting period is generally 3 years. Many people here and other places told me two years. But, when I applied for a loan I got the bad news that 3 years is pretty much the standard. However, was informed by my broker that one of their lenders only required two years for a VA loan.

[LoveBubble5]

Ok, was thinking again about the credit aspect of this. Maybe the foreclosure will show, maybe it won't on my credit report. My score is already rising in the year since I discharged. If a foreclosure shows up on my report, will that knock the score down a bunch of points? People keep telling me the damage is already done, a foreclosure is no worse than a bankruptcy, ect. But what I'm also getting is that the farther I am timeline-wise away from the BK, or debt, or whatever- the more better off I will be- but does that mean my score will get better?

I paid off a student loan back in March, which of course is after my BK. My score jumped 30 points in that month, so I thought the paid off student loan did that. However, after looking at my credit report, I'm not even seeing that particular student loan being reported anymore. It was reported a few years back when I was late with payments, but not now after it's all been paid off. And I'm wondering if I should even contact the reporting agency to dispute it not being reported, because that would mean if they list it, it would also show that I was late with payments... I just don't understand how my score would jump so high though. I only have a measly $400 limit credit card, which at that time I'd only had for two months.

Where I'm really going with this is, if I pay a student loan off I assume it will help my score. But then if the foreclosure happens after I pay off the loan, will the foreclosure then make my score drop some more? Would I be better off waiting to pay off the loan/s until after the foreclosure process is all said and done?

[tobee43]

Ok, was thinking again about the credit aspect of this. Maybe the foreclosure will show, maybe it won't on my credit report. My score is already rising in the year since I discharged. If a foreclosure shows up on my report, will that knock the score down a bunch of points? People keep telling me the damage is already done, a foreclosure is no worse than a bankruptcy, ect. But what I'm also getting is that the farther I am timeline-wise away from the BK, or debt, or whatever- the more better off I will be- but does that mean my score will get better?

I paid off a student loan back in March, which of course is after my BK. My score jumped 30 points in that month, so I thought the paid off student loan did that. However, after looking at my credit report, I'm not even seeing that particular student loan being reported anymore. It was reported a few years back when I was late with payments, but not now after it's all been paid off. And I'm wondering if I should even contact the reporting agency to dispute it not being reported, because that would mean if they list it, it would also show that I was late with payments... I just don't understand how my score would jump so high though. I only have a measly $400 limit credit card, which at that time I'd only had for two months.

Where I'm really going with this is, if I pay a student loan off I assume it will help my score. But then if the foreclosure happens after I pay off the loan, will the foreclosure then make my score drop some more? Would I be better off waiting to pay off the loan/s until after the foreclosure process is all said and done?

it really is a "personal" decision about paying off the loan. to me, the sooner you're done with it the better. i know you are worried about your future with your credit situation. however, i truly believe soon the banks will be making some adjustments (once they finally begin lending again), because there are far too many in this country with blemishes now on their credit reports.

if the banks want to do business in the future from all of the customers they lost i do think they will have to change some policies. remember banks are really not lending to many at this point. i still believe the longer between your CLOSE date, (not that your discharge order is not important), but the more time and distance between when you apply for credit and that date, the greater the chances one has to re-establish their credit.

time in many cases diminishes many wounds, and i think there is a strong possibility that includes one's credit standing.