Mortgage still reports after not reafirming

[carlos74]

My chapter 7 was discharged in 2007. I did not reafirm any of my two loans. My second Mortgage stopped reporting back in 2007 to my credit. My first mortgage still reports to my credit as we speak. Isn't this ilegal?
My attorney told me that I could walk out of the house any time and will not hurt my credit.
After trying to get a modification with no luck I'm ready to walk out of my house but if I miss payments they will report it. I'm sure they will report it as forclosed too in the future.

Can someone help me understand why they still reporting and what to do next?

thanks so much!

[sh9730]

Well, looks like as for this aspect of things you got the best of both worlds - positive credit reporting for all the payments you HAVE been making and the ability to now dispute it to show IIB when you are ready to leave!

I did get a modification AFTER discharge and am happy with it, but one of the bummers is I now dont get that positive reporting of my monthly payments. However, if I ever leave in the future I wont have to go through what you are going to have to now...

So, when you are ready to stop making payments - dispute it as IIB and they should change it. NOW, it SHOULD revert back to the date of BK and therefore not have as dramatic of an effect on your score - but you ll need to make sure that it reports correctly. Your score will still go down some, because you have been getting the benefit of the positive payments so far....

[carlos74]

Thanks for the input. What do you mean report it as IBB? How do I do that?
Thanks!

[sh9730]

When you stop making the payments - you dont want those negatives showing up on your credit report - so file a dispute with the credit bureaus saying this account was "Included In Bankruptcy". They will change it so that no payment activity at all is recorded, good or bad.

[carlos74]

Ok I just disputed with the three bureaus. Now if they already posted late for last two months, will that go away and credit score will come back up?


Thanks so much!

[sh9730]

If they were already reporting recently missed payments, yes it should go up - but when the actual FORECLOSURE hits your report it will likely go down again as another (seperate from the BK) negative public record. The BK doesnt erase that.

[carlos74]

Wow I didn't know that the Foreclosure will stay in credit even after been discharged. I was thinking to buy a new home since my modification was denied and can't refinance a 7.2 fixed rate because I'm underwater.

[sh9730]

Well, its not only your credit score, but most banks will not allow you to get another mortgage until after a waiting period, FROM THE DATE OF FORECLOSURE, usually 3-5 years. Sorry.