Did we make the wrong decision

[cismith54]

BK Timeline

[SMinGA]

I believe the rule is 3 years after a foreclosure to be able to buy again, and that clock does not start until the actual foreclosure as that is when ownership changes hands.

Other than that, be careful who you get advice from and what their motivation might be. You contacted a realtor - and realtors make money from buying & selling homes. Any advice from them is going to be driven by that fact.

If the house was your only debt, then perhaps other options could have worked for you. But then, bankruptcy is option that puts you in control and allows you to truly move on. Now you don't have to worry about anyone coming after you with judgments to garnish wages or bank accounts, and its really not important what happens with the foreclosure in terms of credit. Its in your bankruptcy - the foreclosure should not be a separate public record on your credit report.

[neorecon]

Actually the foreclosure is a separate record. The CR 'hit' comes from the BK where the debt / mortgage is discharged, but the other issue is the public record section of your CR. There will be one entry there for your BK, and there will be another one (if you do a SS or DIL for LESS than what is owed) for your foreclosure.
I've been trying to find info on how this affects your CS, but sofar it seems that the only thing this does is identify when the 3-4yr clock starts.

[cismith54]

I believe the rule is 3 years after a foreclosure to be able to buy again, and that clock does not start until the actual foreclosure as that is when ownership changes hands.

Other than that, be careful who you get advice from and what their motivation might be. You contacted a realtor - and realtors make money from buying & selling homes. Any advice from them is going to be driven by that fact.

If the house was your only debt, then perhaps other options could have worked for you. But then, bankruptcy is option that puts you in control and allows you to truly move on. Now you don't have to worry about anyone coming after you with judgments to garnish wages or bank accounts, and its really not important what happens with the foreclosure in terms of credit. Its in your bankruptcy - the foreclosure should not be a separate public record on your credit report.

Thanks for the quick response. That sounds good to me. Maybe I don't need to worry about it then.

[cismith54]

Actually the foreclosure is a separate record. The CR 'hit' comes from the BK where the debt / mortgage is discharged, but the other issue is the public record section of your CR. There will be one entry there for your BK, and there will be another one (if you do a SS or DIL for LESS than what is owed) for your foreclosure.
I've been trying to find info on how this affects your CS, but sofar it seems that the only thing this does is identify when the 3-4yr clock starts.

Does this mean if I do a SS or a DIL that it will still appear on the report but not as a forreclosure?

[neorecon]

From my understanding, and I'm not a professional just a 'joe' doing research as I'm in this boat now after our BK. I'd suggest talking to a BK attorney as they usually have some good information on this. I know a Foreclosure will show up as a public record, but I'm unsure about SS and DIL. From the few things I've found online it ranges from no, to yes if the amount obtained in the SS or DIL will not cover the full costs of the mortgage(s).

[cismith54]

We emailed to our attorney about this. His reply stated that as long as the trustee abandons our house that it would be in our best interest to attempt a DIL. He also stated that the bank would probably talk to us about it as long as we stipulate that we will not be filing a Motion for Sanctions for violating 11 USC ss362. That being said, is very confusing. Anybody have any idea what is meant by that in laymans terms?

[lrprn]

We got curious today and spoke with a Virginia RE office about what to expect with a foreclosure against us. He informed us to plan on waiting 4-5 years before trying to purchase again. He also led us to believe that a SS or DIL would not impact us as much.

Ummmm....what else would you expect a real estate person to say? They want you to sell the house any way possible - that's how they earn their money. Huge conflict of interest.

No matter whether you have an SS or DIL, it still shows you had major financial trouble. No home lender is going to overlook either of these.

Most Ch 7 filers here in the forums have been able to get pretty decent home financing in about 3 years as long as their credit record was squeaky clean after filing.

[BobMango]

Ummmm....what else would you expect a real estate person to say? They want you to sell the house any way possible - that's how they earn their money. Huge conflict of interest.

No matter whether you have an SS or DIL, it still shows you had major financial trouble. No home lender is going to overlook either of these.

Most Ch 7 filers here in the forums have been able to get pretty decent home financing in about 3 years as long as their credit record was squeaky clean after filing.

I'd agree. My aunt is a realtor in California and she has told me that there really is no difference, damage wise, between a SS and foreclosure, so her advice was to save the hassle and let the house go into foreclosure. She's worked more than a dozen short sales in the last 18 months and none of them have closed yet.

In my case we had a house sold at foreclosure about 2 weeks before we filed for Chapter 7. We're now six months post discharge. The only public record on my CRs is the bankruptcy. The real estate loan associated with that property was IIB and does show that way. My credit scores (real ones) are now 635, 644 and 645. No idea what my scores were just before filing, but they were in the high 700's in late 2007.

[cismith54]

We emailed to our attorney about this. His reply stated that as long as the trustee abandons our house that it would be in our best interest to attempt a DIL. He also stated that the bank would probably talk to us about it as long as we stipulate that we will not be filing a Motion for Sanctions for violating 11 USC ss362. That being said, is very confusing. Anybody have any idea what is meant by that in laymans terms?

I think I might be doing this wrong. My concerns are mentioned above. Any thoughts on this will be appreciated.

[LoadedGuns]

We emailed to our attorney about this. His reply stated that as long as the trustee abandons our house that it would be in our best interest to attempt a DIL. He also stated that the bank would probably talk to us about it as long as we stipulate that we will not be filing a Motion for Sanctions for violating 11 USC ss362. That being said, is very confusing. Anybody have any idea what is meant by that in laymans terms?

I think I might be doing this wrong. My concerns are mentioned above. Any thoughts on this will be appreciated.

You should be emailing your attorney a reply to clarify his answer.

[cismith54]

I already have. I am waiting on his response. I wanted to know if anyone else had dealt with this issue.