Foreclosure and BK Double Hit

[mlopez60120]

I filed for a BK Chapter 7 in 2012. My Mortgage was included in the BK. It was discharged in the bankruptcy in 2013.

I did not reaffirm the mortgage but I paid my mortgage on time until July of 2014. At this point I asked the bank that I needed to move and the house market sucked and my value was under water and would not be able to sell it so I want to do a deed in lieu. The mortgage company did nothing now 8 month later they are foreclosing.

I made it my point to build our credit and work my way up since our BK in 2012. However now I feel as if the foreclosure is setting the clock back and I am getting double hit. I paid the price with the BK and accepted the bad credit and the time to rebuild however now the foreclosure is threatening to screw me for an additional 3 years from foreclosure date.

Is this correct ? I thought I was protected with the BK? I feel as if its a “double hit” I am in Illinois

[mynameainttracy]

Why do you feel like you are being double hit? The bank has to proceed with FC in order to get the home out of your name. It will not show up as a separate public record. What it will do is extend the time that the negative account stays on your credit report but over time its impact on your scores is not that bad.

We did the same thing with our home in our CH 13. You should be thankful that they are moving quickly.

[LadyInTheRed]

Since you did not reaffirm the mortgage, the lender cannot report post-filing delinquencies on your credit report or sue you for a delinquency. That is the protection you received from the BK. If they do report a post-BK delinquency, you should dispute it.

My understanding is that the foreclosure will show up in the public records section of your credit report, but if I remember correctly, at least one bkforum member said that a post-bk foreclosure was nowhere on their credit reports. The fact that you have been rebuilding should still help keep your score from dropping as low as it might otherwise have. The negative effects of the foreclosure will decrease with time. From what I've read, the foreclosure will have very little effect after 2 years.

[mlopez60120]

The reason I feel I am double hit is because I filed BK in 2012. House included and now 2015 they are foreclosing and they want to report the foreclosure. makes no sense

[mynameainttracy]

The foreclosure will not show up on your credit report. The only place it was on mine was in the comments section for the creditor on my credit report. I was successful in having those comments removed.

[Sch0810]

Curious why they didn't do your deed in lieu?

[mlopez60120]

There response was that there process is to conduct a loan modification first I at least had to apply. If I did not qualify then step two would be a short sale then step three deed in lieu or foreclosure.

[Sch0810]

what if you didn't want to stay in the house? would they make you do a loan mod?

[mlopez60120]

According to them it was part of the process. It did not make sense to me because I was not staying in the house so why would I want a loan modification. I talk to two or three different people at the bank and they all said the same thing. In my opinion not sure if this is valid or legal but I think that by me doing a loan modification I would have had to reaffirm the loan thus loosing the protection of the BK.

[Sch0810]

I believe you're correct. I never reaffirmed my mortgage, either. I'm just getting into the process of what to do with my current house because we are buying a new one. Thanks for answering my questions

[mlopez60120]

Are you in BK? Are you foreclosing? How are you able to get a mortgage for a new house ? reason I am asking is I am having a hard time getting a mortgage . Since my BK I have best credit I have ever had I have good down payment but they are all telling me its 3 years from the date of foreclosure not BK

[Sch0810]

I messaged you, mlopez