Foreclosure - Mortgage Questions

[myo1974]

Hi Everyone,

We had our bankruptcy (ch 7) discharged in December 2013 in the state of NJ. We surrendered our home as part of the bankruptcy and have since moved on to a rental in another state.

No news on when the foreclosure will happen. Last mortgage payment was made in July of 2013.

My question is...how soon would we be able to buy another house? Is there any possible way to speed up the foreclosure?

Thank you!
Myo

[mlopez60120]

I am in the same situation. Fannie Mae takes into consideration the BK date but HUD/FHA says the foreclosure date. I have contacted HUD/FHA multiple times and get different answers. My advise to you is to write HUD/FHA, congress, political lawmakers and ask them to review the law and to clarify what is the waiting period when one has foreclosure and bankruptcy on the same mortgage.

There is a petition on change.org that you can support and my advise is keep pushing I started to write letters and pushing to get clarification on the law and ensure people like us do not get caught into this limbo.

[babsthebear]

FHA required waiting period of 3 years begins on the date of the last derogatory event, which in your case will be the date that the property is deeded out of your name. For Conventional loans, it is 7 years. HOWEVER, the situation you describe is different. You included your mortgage in the Chapter 7. Fannie Mae begins the waiting period as though the derogatory event was a BK - NOT a foreclosure. The waiting period for obtaining a loan after a BK is 4 years for Fannie Mae. So far, they are the only agency to recognize that it could take years for the bank to actually dispose of the property.

[myo1974]

FHA required waiting period of 3 years begins on the date of the last derogatory event, which in your case will be the date that the property is deeded out of your name. For Conventional loans, it is 7 years. HOWEVER, the situation you describe is different. You included your mortgage in the Chapter 7. Fannie Mae begins the waiting period as though the derogatory event was a BK - NOT a foreclosure. The waiting period for obtaining a loan after a BK is 4 years for Fannie Mae. So far, they are the only agency to recognize that it could take years for the bank to actually dispose of the property.

Thank you for your response! I have some other questions, if you don't mind. About a month ago, the bank contacted me and offered a deed in lieu, so we are in that process right now. What effect would that have on a possible mortgage in the future?

Additionally, what we are hoping to do is to buy a very cheap house, between $25,000 and $80,000 (at the most). We are living in Maine and there is decent real estate up here that is very, very inexpensive. Would it be possible to perhaps take out a personal loan if the house was cheap enough or would that be impossible due to the hit our credit scores will take? Would purchasing an inexpensive house make it easier to get an FHA?

Thank you again!

[babsthebear]

If you do a deed-in-lieu, your FHA waiting period would still be 3 years from the date the property is deeded out of your name. The price of the home has no impact on eligibility. Sorry, wish the news was better...

[myo1974]

If you do a deed-in-lieu, your FHA waiting period would still be 3 years from the date the property is deeded out of your name. The price of the home has no impact on eligibility. Sorry, wish the news was better...

Thanks! Actually, that's not so bad, to be honest. Will give us more time to save up!

[mornimorkel]

Being in a financial trouble is difficult and getting out of one is more challenging.

If you have two mortgages and you are facing an impending foreclosure, you should first know the facts. The second mortgage is a loan that is placed on the price of your house. The second mortgage uses the existing equity as the collateral. It is actually a lesser priority than the first mortgage. These two mortgages are obtained separately from different lenders that specialize in mortgages.
However, this is not always the case because there are some cases wherein you can obtain the second mortgage from the same lender as your first mortgage.

In most cases of the foreclosure, it is the first mortgage company that would begin the process.

[brokeinfl]

Anyone able to do the deed in lieu and rent the property for a period of time? I was just offered this option and it seems like a good option.

[bcohen]

Anyone able to do the deed in lieu and rent the property for a period of time? I was just offered this option and it seems like a good option.

I assume what you mean by this is that the bank will transfer title to its name, and lease back the property to you? How is that a good option, even if you are planning to move out soon anyways? Currently, you are the legal owner of the property. You can continue to live there, even if you stop paying the mortgage, until and unless the lender successfully forecloses. You can save the money which you would have otherwise had to spend on rent. If you do the deed-in-lieu, then you will stop being the legal owner of the property, and you will have to pay rent each month in order to continue living there. I fail to see how this is a good idea.