Foreclosure

[MichMom]

I'm new here. This is such a great forum. So much great info. Well, here goes my story. We filed BK in 2005. At the time we barely had enough to even pay the BK lawyer. We never reaffirmed on our home because we just didn't have the extra money to pay the lawyer to do the reaffirmation. We just kept making our payments on time like normal. Then about 6 months later out ARM was up and our mortgage payments went up fast. We tried to refi and tried to keep up with the payments. The real estate market in our area took a dive so our home didn't appraise for enough to refi. We were told that since we never reaffirmed that we could still just walk away from the mortgage and owe nothing. On my credit report the mortgage shows closed since the BK. My question is, will the foreclosure show up on my credit report? Will I be responsible for anything on this house such as property taxes, any of the late fees that have accrued, etc? Will I get a 1099 for debt forgiveness? The home is currently listed with a realtor, he's working on a short sale for us but no progress so far. I have read some other threads that indicated attempting a short sale at this point is useless, is that correct? Any advice or info would be greatly appreciated.

[BassBoy]

Yes, you could walk away from the home, but I do believe that it may show up a double whammy on your credit report because it's 2 years post discharge. You will not be responsible for any owed balances (late fees, shortage of escrow and etc), but you will have to keep the insurance current.

You may be right about a short sale being useless. I haven't heard of too many going well.

[MichMom]

I'm sorry to sound dumb but what does that mean, it will show up as a double whammy? How long after the redemption date would I need to maintain insurance?

[SinkingFast]

Both Foreclosure and BK are probably the 2 biggest negative hits that can show on your Credit Reports.

The Lender has to go thru Foreclosure to get back the title. Unless, you could miraculously get the Lender to agree to take a Deed In Lieu of Foreclosure.

When BK and Foreclosure occur together, or within a short time of each other, prospective Creditors in the future view the 2 items as 1 negative event.

If you file BK and a significant amount of time lapses between filing and surrendering your home, the Foreclosure is considered a whole separate event by Lenders in the future.

A double whammy.

[B12]

Keep insurance paid until the deed is out of your name. Taxes and Homeowner's fees do not have to be paid.

[MichMom]

When will the deed be out of my name? When the foreclosure is complete and we move out or when the mortgage company is able to sell the house to someone else?

[demismom]

Our house sold at Sheriff's sale on Sept 20th, on the 28th there was a Quit Claim Deed filed by the Mortgage Company. That's legally the only way a house can no longer be considered "in your name", when something is filed with the Courthouse. At least, that's the way it was explained to me. So until that happens you're liable for the insurance on the property.