Rental Verification on Discharged Mortgage????

[spooby72]

We have been discharged from our Chapter 7 and my give up our home that we did not reaffirm.

We talked with several apartment complexes and believe we can be approved with a good mortgage history. We have never been late but our mortgage is shown as being discharged and closed.

1. Will this mortgage continue to report on a monthly basis to the bureaus?

2. How will it look to an property management company when we have lived in our home for up to six months without paying our mortgage during the foreclosure process? Up to the time of discharge, we have never been late.

3. Will the property management company verify our mortgage over the telephone and can the mortgage company report us as delinquent...since the account is closed and discharged?

[AAAArt]

You should be able to get by showing them a payment history from your credit report up till you filed and the discharge papers. If they want more, then you may have to go to the bank and get a letter on their letterhead signed by a bank officer stating the facts.
They "may" continue reporting you as late to the CRA's, but if they do, you should be able to get that corrected and taken off.
Prob. worst case scenario is that the property management co. will want more of a deposit. Maybe a month's rent instead of $100 or maybe 2 month's rent instead of one.
I seriously doubt that not paying for 6 months after you file Bk will cause you any problems which can not be worked. Pull your credit report now and just before you apply for an apt, and be up front w/ them re: the situation. They can usually tell you up front based on that info, before they do a credit inquiry whether or not they think you'll qualify. Remember that you don't want a bunch of inquiries lowering your credit score, but that all presented w/in a 14 day period, count as one inquiry. Best wishes, Art

[StaciMM]

The mortgage shouldn't report anything after the discharge. You can't be dinged for being 'late' when you don't owe them anything.

Regarding verification, that's a sticky subject. I don't know for sure, but I'd guess you would have trouble getting any kind of verification out of the mortgage company on a debt discharged in BK. You should be ok to show copies of cancelled checks to support your history, but of course you'd have a gap if you go a few months without paying and THEN apply for an apartment. Apartment complexes work off of 60 day notices generally. Maybe you could apply 2-3 months before you plan to move? Such as, make your last mortgage payment on Jan. 1, and on Jan. 31 submit an app for an apartment requesting to move in mid to late April. (Residents would give notice around the 1st of Feb. to move out end March, and the complex would need at least 1-2 weeks to turn the unit.) When you applied, you could show 12+ months of cancelled checks and just not pay any more mortgage payments after that. You could probably even call them up in the first 1/2 of March and push your move in date back another month. They'd change what apartment you were scheduled to move into, but it would buy you another month.

If there are complexes that are in the middle of construction, you could probably prelease even further in advance as they would know when each building was scheduled for completion.

[spooby72]

Thanks!

Thanks for the ideas...the new construction may be a possibility that I never considered. We have done some checking with complexes this week and have gotten good responses.

There is one new complex going up that we will have to check on completion times...that was a great idea!

[StaciMM]

No problem! I've worked in property management for most of my 'real job' life. Pre-leasing is something that is the goal but doesn't often happen. (Most people are not ready to plan 2-3 months down the road.)

I think the benefit with preleasing a new construction is you don't have to worry so much with what you're going into. You can pretty much order up what you want. With preleasing an occupied unit, you're hoping you'll get what you want but it may not turn out that way.

Generally, though, they'll process your app in the beginning and then you'll be all set. Worst case scenario, they may want confirmation that your income hasn't changed if you're moving in several months or more down the road. And, if you prelease a new construction I dont' think it would seem odd that you're acting in advance. (People put 6-8 months into building a house, why not put 3-6 months into 'ordering' exactly what you want in an apartment?)

[bkfiler]

staci, do you deal with apartments too?

if so, how do most apt mgrs deal with bks? is it just a matter of calling them, asking if they accept people with bks and then if so asking how much deposit is needed?

thanks

[StaciMM]

Right now, I work on the corporate side in accounts payable-so I don't deal with the properties policies directly. From when I did work onsite, though, a few notes:

The property has to follow standard guidelines. Whatever their guidelines are, they have to be in writing and they have to treat everyone the same way. If you have good rental history & stable job history, then credit issues (even BK) can likely be overcome by paying an extra deposit. If you have no real rental history, it will be harder. Ask questions. If you don't want to do it in person, call around. They can't give you a certain yes/no on whether or not you'll be approved, but they can let you know how they view credit and whether or not leasing with a bankruptcy is a possibility.