Three years from BK 7....considering letting house go....advice?

[Egrain]

I am in the same position. ...2.1 years out from a Ch. 7 BK that included the house. I still made the payments but did not resign. After this 2 years we are still $80 grand underwater. A realitor friend is telling me that I wont qualify for mortgage the underwrighters until this house is legaly out of my name, by either selling or forclosure. A forclosure will be another hit to my credit and I have to have 3 years after a forclosure to get Va funding. A forclosure could also take years to get out of my name. I am very confused that I can my credit can be further damaged by something I dont leagaly have to pay for. But it looks like this is the case. If any one has any advice I am all ears.

[carlos74]

Also, walking after away from the home with our names in the deed. Can we get a mortgage for a home?

Thanks so much guys!

[carlos74]

Hmmmm, what about the deed? My wife's name is on the deed and she did not filed bk. Will the bank come after her? I only used my credit to purchase the home.

[cory1848]

Both mortgages are with same bank and they were not reafirmed. I know I can just walk away but I'm trying to avoid the foreclosure negative public record on my report.

Like LadyinTheRed mentions, in the past 3 years I have researched this I have yet to find anyone that has had a foreclosure appear on their CR Public records AFTER BK7 discharge when the house was not reaffirmed. I am in the same boat as everyone else. Waiting on the process to complete. If it does appear on my CR after the sale, then I may hire an attorney to fight it to get it removed or go through that process myself.

[carlos74]

Both mortgages are with same bank and they were not reafirmed. I know I can just walk away but I'm trying to avoid the foreclosure negative public record on my report.

[LadyInTheRed]

If you stop paying on a discharged debt, the lender cannot report late payments on your credit report. But, a foreclosure may show up on the public records section of your report. I don't know how that affects your ability to get non-mortgage credit. For mortgages, a potential lender will find out about the foreclosure even if it is not on your credit report. Whether a BK and a later foreclosure on a discharged debt is a "double hit" for mortgage qualification is a question on which there has been much disagreement. From the many discussions I have read here, I think FHA guidelines do not call for a double hit. But, that doesn't mean the lender won't look at it that way. The best answer to the question will come from the lender's underwriting department.

Ok folks, I'm in the same boat, Discharged chapter 7 in 2007. My first fixed loan has a 7.2 interest rate and owe 105000. My second mortgage is with the same bank and haven't paid it in a year. My home value is 125000 but I owe around 135000. How about is I sell the home for what I owe in the first mortgage? Is this possible? I think that will avoid foreclosure right?

That would be a short sale which you can only do with the agreement of the holder of the 2nd mortgage. You didn't reaffirm your mortgage did you? If not, rather than go to the trouble of doing a short sale, why not just stop paying on the first mortgage and live in the house rent-free until the bank decides to foreclose?

[carlos74]

Ok folks, I'm in the same boat, Discharged chapter 7 in 2007. My first fixed loan has a 7.2 interest rate and owe 105000. My second mortgage is with the same bank and haven't paid it in a year. My home value is 125000 but I owe around 135000. How about is I sell the home for what I owe in the first mortgage? Is this possible? I think that will avoid foreclosure right?

[Miknan]

I've heard too many mixed answers on this. I'm foreclosing so I can't control this anyway. I'll find out eventually. If you think about it, many people file bk without foreclosing so for those of us that do both i have to believe we take two knockout hits. My co-workers wife is a mortgage broker and she said it would take another hit so that's what I'm expecting.

[machine2]

I have talk to several lawyers about this and they seem to just confuse me more. All I want to know is if the mortgage company can double hit you on this...

[indeep59]

Indeep, did you forclose or just stop paying? I talked to a mortgage lender who said it would drop after forclosure. I've read online it will also. I hope I'm wrong but it seems naive to believe that after bk and forclosure I'd have a FICO of almost 700. If I forclose I expect it to drop.

I'm still in the house. Stopped paying but going to resume doing so

From what I know you can't have both a bk and a foreclosure
On your credit report. You can't be hit twice negatively on one account like that.
Mine shows IIB, included in bankruptcy.

I can believe your credit score can be close to 700

Mine is approaching that as well.

[Miknan]

Indeep, did you forclose or just stop paying? I talked to a mortgage lender who said it would drop after forclosure. I've read online it will also. I hope I'm wrong but it seems naive to believe that after bk and forclosure I'd have a FICO of almost 700. If I forclose I expect it to drop.

[indeep59]

You won't take a hit on your credit report if you stop paying on a mortgage that was included in a bk 7.
I got a mod on mine in Jan 2010, made payments for a year, during that year (July) I filed and was discharged for the 7. Had to stop making payments again early last year, did not affect my credit score one iota. It's been ascending ever since the filing/discharge.

[ValleYum]

I, too, am confused about that, machine2. It goes against everything I have read.

[machine2]

So I am confused, If the mortgage was charged off in the Chapter 7, why would you take a hit on your credit report? I am in the same boat and I am learning about this.

[Miknan]

Also, if you stop paying, nothing happens with the second mortgage. They are screwed. Also, you shouldn't expect much in regards to contact with you. Since it was all included in bk they can't even try to collect from you now. I don't get anything even in the mail from my second. WF occasionally sends a paper showing how much I owe but they state "this is not an attempt to collect".