crazy phone call --HELP

[sobroke]

I filed chpt.7 and am surrendering my house. The house began the foreclosure process. I recieved yesterday a request to lift the automatic stay (which is fine because i already moved) Well...last night I get a phone call from a man who is with an investment company. He wants to buy our house. He told me that he negotiates a settlement with the mortgage holder (Horizon) and then we proceed with a purchase agreement. THen he said that this would be better for us because we would not have a foreclosure on our record. Anyone heard of this?? Minny? EdytaHome? I am hoping to buy a house next summer. We will have 20% to put down and our credit isn't too bad right now (640 FICO) Any thoughts???

[HHM]

Its basically called a short sale. The problem is, it appears they have already started foreclosure and you have filed chapter 13 bankruptcy, thus, the damage is already done to your credit report.

The only real benefit to you is that the deed will probably get out of your name quicker if this investor buys the house than if you wait for a foreclosure.

[sobroke]

Will the foreclosure still be on our credit report or should it be IIB? Is it that big of a deal if you have both a foreclosure and a bankruptcy? Will it be extra difficult for you to obtain a mortgage?

[HHM]

I hear it both ways. Logically, when it comes to specfically a new home loan, I think a foreclosure is worse than a bankruptcy because a foreclosure relates specifically to a house whereas a bankruptcy effects credit worthiness generally. But some say otherwise.

The deal with foreclosure is that even if you surrender your house in a BK, the bank still "forecloses" the property as that is the only way they obtain title and dispose of property. Thus, knowing that, a short sale might be the way to go, or at least look into it.

[sobroke]

Thanks for the info HHM. I talked with my attorney and he said that if the lender of my mortgage will erase all deficiency balances then that may be the way to go. I just don't want to get "screwed" while trying to obtain my fresh start. I will talk to this "investor" again. He told me that one of the benefits would be that it wouldn't be as public as an auction and he would take over care of the house (and insurance ) I am just confused!

[EdytaHome]

I received a phone call of such myself before the foreclosure went through. Some guy in Canada wanted to buy the house. These people make money because of your situation. Honesty, I didn't feel very good about the whole process. Remember that you will have to disclose a lot of personal information to get a short sale done. The problem is you don’t know who these people are most of the time.
Once the foreclosure process starts, accept the fact that you will have it on your CR even if you proceed with the short sale. If you are planning on buying a home soon, it may be quite difficult in such a short period of time.

[sobroke]

So either way it looks like my credit is ruined (obviously-duh!). I was just hoping to save what is left of my credit, but if the preforeclosure is still going to be on my credit report, then why would I do this? It seems like more stress added onto this whole thing. If I let it go to a sheriff auction, then I am done with all of this--I don't have to think about it, right? Thanks guys.