What will happen to our credit?

[sleeplessinohio]

Okay.

I posted a question down below and got some great answers. I'm trying to educate myself as best I can.

Bottom line is that we really can't afford our house. It falls just below the 31% debt to ratio that would qualify us for a loan modification. If our 8.5% rate were a bit lower, I actually think we COULD afford the house, but Wells Fargo doesn't seem to agree.

So. We filed Chapter 7 and it was discharged about 1.5 years ago. The house was included in our bankruptcy and we did NOT reaffirm.

What will happen to our credit rating/report/history if we stop making payments and go through foreclosure?

One of my worries is.. I'm sure that anyone who rents these days, either houses or a rental company, will check our credit report. How does one find somewhere to live when they are in a foreclosure process?

Thanks for any input you might have. I sincerely appreciate it.

sleepless in ohio

[keepinitreal]

The foreclosure will show up on your credit report.

Lots of people are in your shoes so landlords won't be shocked.

I think large apartment complexes will use your credit score to decide whether to rent to you or not, but you should be able to rent a house or an apartment that's not a large complex.

If you're not sure what to do, call some places for rent and ask if they rent to people who have lost their homes. Then decide what to do.

Good luck!

[debee]

That's what I always thought too and it's what made sense to me - the foreclosure would appear in the public records section - but I don't think that's true anymore. Several forum members have reported that their foreclosures never did appear on their credit reports.

I'm pretty sure Amy26, Justbroke, and DebtEnder all said theirs never showed up.

So for that reason, I don't think anything will happen to your credit now if you let the house go into foreclosure.

[justbroke]

My foreclosure does not show up! There is neither a public record for the (non-judicial) foreclosure, nor any evidence of a foreclosure on my credit report(s). (However, I'm having other "new" reporting issues with my lender.)

[keepinitreal]

That's what I always thought too and it's what made sense to me - the foreclosure would appear in the public records section - but I don't think that's true anymore. Several forum members have reported that their foreclosures never did appear on their credit reports.

I'm pretty sure Amy26, Justbroke, and DebtEnder all said theirs never showed up.

So for that reason, I don't think anything will happen to your credit now if you let the house go into foreclosure.

Good to know! I may be going down that same road in the future, so I hope this is true for everybody!

[screentest]

Agree with Debee and JB on this. My in-laws Foreclosure after chapter 7 does not show on thier credit report or public records section. This occurred nearly two years ago now and still no record. Same with several friends, no record of FC if they filed BK 7 first.

ST

[Sweetpea3829]

Hmmm, I can't remember if the foreclosure on our first home showed up or not. We were discharged in April of 2007. The house we lost...I vaguely remember receiving notifications that a foreclosure sale would occur in February of 2007. But...I know that it didn't actually happen until late in 2007, well after our discharge. And I can't remember if it shows up.

You know...I don't think it does. I think it shows as IIB.

Now...the second house that we're losing (gosh, I feel like such a dirtbag writing that I've lost two houses)...I'm fairly certain it won't further damage our credit score. It does, however, affect our ability to buy a home for the next three years following the foreclosure sale date (which is why we're really hoping we can close on our USDA loan BEFORE the foreclosure officially happens).

From what I understand, there cannot be any further damage to your credit score.

Lenders WILL be able to determine that you've had a foreclosure in the last three years.

Renting...a lot will depend on where you're trying to rent. A lot of private landlords are very understanding of things like this. And many private landlords don't actually do a full credit check. Apartment buildings may have more stringent requirements. But I doubt they'll see a recent foreclosure if it's not listed as a foreclosure on your credit report....again, assuming it only lists as IIB.

I can tell you for sure...as long as the bank reports correctly, if you stop making payments on a non-reaffirmed mortgage, it will NOT affect your credit score. We haven't paid our non-reaffirmed mortgage since last August and our score has held steady.

[maffy]

Nice to hear that the foreclosures aren't showing up on the credit reports. I just received my discharge and included my house but am currently "staying and paying". I'm so upside down it would be foolish to stay here in the long run, but I was wondering does any know how long it takes for the forclosure process to happen after you get behind?

[Sweetpea3829]

Maffy...if that isn't the million dollar question! It's different for everybody. And it's different depending on too many variables. For us? We stopped paying on our ride-through in August of '10. They're still sending us notices of acceleration. I suspect by the end of the year, we'll probably be foreclosed, if no sooner...but we shall see.

[maffy]

Maffy...if that isn't the million dollar question! It's different for everybody. And it's different depending on too many variables. For us? We stopped paying on our ride-through in August of '10. They're still sending us notices of acceleration. I suspect by the end of the year, we'll probably be foreclosed, if no sooner...but we shall see.

Thanks Sweetpea3829! I wish you well with it all (and no, I don't think you're a dirt bag... unfortunate circumstances can happen to anyone)