4 yrs post BK, Foreclosure question

[dilynn]

I am 4 years today post BK chapter 7, did not reaffirm mortgage. I deceided to let my house go back a few months ago. I stayed there for the last 4 years because I had my job there etc.... it is time for me to go.
How is this going to affect my credit report? Will this back the clock back up by 4 years...meaning I am now starting my 7-10yrs over?? I am guessing this was not the best decision..Or does it not matter to much??
Thanks

[justbroke]

How is this going to affect my credit report? Will this back the clock back up by 4 years...meaning I am now starting my 7-10yrs over?? I am guessing this was not the best decision..Or does it not matter to much??

For the most part, your credit report is already affected. The mortgage should be listed as IIB (Included in Bankruptcy). This will not change.

Walking away, and having a subsequent foreclosure, seems to only have a little affect on your ability to get mortgage financing. While FHA will loan to a Chapter 7 debtor 2 years after discharge.... they still apply their 3 year post-foreclosure rule for homes that were foreclosed upon, whether or not they were IIB.

If you sell the home and it would cover the mortgage balance, then you'd be okay to finance again. Otherwise, the financing clock (for mortgages) would more than likely be reset to run 3 years.

[ela805]

For the most part, your credit report is already affected. The mortgage should be listed as IIB (Included in Bankruptcy). This will not change.

Walking away, and having a subsequent foreclosure, seems to only have a little affect on your ability to get mortgage financing. While FHA will loan to a Chapter 7 debtor 2 years after discharge.... they still apply their 3 year post-foreclosure rule for homes that were foreclosed upon, whether or not they were IIB.

If you sell the home and it would cover the mortgage balance, then you'd be okay to finance again. Otherwise, the financing clock (for mortgages) would more than likely be reset to run 3 years.

Wow, I had the same question (but I'm not discharged)...
So what I hear you saying is that the FHA 3 year waiting period doesn't begin until the house has actually been forclosed on... So if I SELL the house the time starts from my discharge date BUT if I walk away, it starts from the forclosure date. Sorry to be so dense, but I THINK you've answered the exact question I had. I just wanted to make sure I'm understanding. THX!!!!

[monkatom]

Yes FHA is 2 years from BK and 3 years from foreclosure. So even if you include home in BK and walk away the 3 year clock starts when the home is sold and transferred from your name. Keep in mind that 3 years is the minumum not a guarentee that you will get a loan.

Ideally I would like to sell my house and use the 2 year discharge date but since i am upside down it is not worth it since the debt was discharged in CHP 7. If you can sell for what you owe on the mortgae, etc then selling may be a better option if you want to get a new mortgage sooner. Do not short sell as the same rules apply as foreclosure at least with FHA.

[dilynn]

What about the 10 year rule where the BK comes off your record?

I guess the question I am trying to ask is...I don't plan on getting a new mortgage, I just want to get my credit rebuilding started and get this bankruptcy thing out of the way. I am worried that by doing this foreclosure 4 years after fact, technically I only have 6 years to go until it is clean, I will be starting over again..Is that true or does my clock keep on going and I still only have about 6 years until this is all over??.

[monkatom]

You're credit report should read IIB so a foreclosure should not effect your credit score. Hopefully someone else will chime in to confirm.

[justbroke]

You're credit report should read IIB so a foreclosure should not effect your credit score. Hopefully someone else will chime in to confirm.

That's correct. The foreclosure after the IIB shouldn't affect the score at all, because the entry will still be IIB, with $0 balance.

[chad9162]

So why would the foreclosure even show up in the credit report if it was included in BK? If the debt was discharged in BK I don't think they can change it to foreclosure 2-3 years later on the credit report, right?? I'm not seeing how the foreclosure on a debt that you are not liable for could hurt you? In fact, I've read on other post and forums that it would have no affect and that its illegal to put it on your credit report when it was included in BK. Anyone?

[monkatom]

The foreclsosure would not be on your credit report but would show in public records and effect your ability to get a future loan.

[Flamingo]

I guess the question I am trying to ask is...I don't plan on getting a new mortgage, I just want to get my credit rebuilding started and get this bankruptcy thing out of the way. I am worried that by doing this foreclosure 4 years after fact, technically I only have 6 years to go until it is clean, I will be starting over again..Is that true or does my clock keep on going and I still only have about 6 years until this is all over??.

Information on credit reports goes away in 10 years from your date of filling your Chapter 7. Information on public records does not go away nor does it go away from the records of whoever has your mortgage now. While your home may be showing as IIB on your credit reports, it doesn't take much for a lender to investigate whether or not you foreclosed. Nothing is guaranteed as to getting a mortgage past discharge or after a foreclosure. Time and pristine handling of credit and financial affairs are the only thing in one's favor as everyone usually finds out. Unfortunately, there is no magic wand for this or similar situations.

[chad9162]

The foreclsosure would not be on your credit report but would show in public records and effect your ability to get a future loan.

Yes, but this assumes that a lender would go check public records, which I highly doubt.

[justbroke]

Yes, but this assumes that a lender would go check public records, which I highly doubt.

Some public records end up on your credit report. Those are the public records that I'd be concerned about.

[chad9162]

Again, a creditor is can not report after a BK if you discharged them. I don't see how it would show up in a CR when it was already IIB.

[bambooshed]

I did a BK in 1993 and one of the creditors did, for several years, update my credit report with a delinquency notice, so that after the 10 years it was still there. When I got a house I had to clear up the report first by showing the BK discharge to the finance people. And finally it's gone. I think it was American Express, who to this day, some 15 years later, still has a record of the unpaid bill and will reject the applications they send me if I apply, which I do from time to time just to see if they are still holding a grudge.

[knotholeone]

I have a question about this. I am in 13 had 341 already made two payments. I put mortgage arregage in the plan. How long do I have to decide if I want to walk away from my house. Do I have to pay the difference between what it is sold for and what is stil owed in the state of VA. I appreciate your help. Still trying to get the hubby to agree to walk.