Posted on: 18th Apr, 2012 11:14 am
my husband and i bought a house 12 years ago. we have a child with a disability, and had to refinance our house a couple of times and take out a second mortgage to pay the medical bills that piled up. we then had to file bankruptcy after all the debt started piling back up. we are looking for a new house, because the one we have is close to forclosure. a realtor friend told me that since we are moving across the country and the mortgages were included in the bankruptcy, we should not mention the pending forclosure...or even owning a house now, for that matter. when our credit is run, the house does not show up as us owing on it, but there's a mortgage co that has now asked for our tax returns for the last 3 years, which does show the house payments. our bankruptcy is over in less than a year, and this is our last chance to get our heads above water. we have to move...it is not optiional. our child is now old enough to have her disability covered by her insurance, so there is no chance of more medical bills. my question is, do we tell the mortgage co about all of this, or do as we are told and not inform them of the pending forclosure until after we have the hosue secured? please help us...i feel bad, but i have to do what is best for our entire family...and keeping a $1600/mo mortgage is not was is best!!
Hello Shill6,
Being a "friend" your realtor is violating some major disclosure laws and also asking you to commit bank fraud. I understand your situation, and it happens daily across the country. The problem you have is you must disclose where you live, and on your credit report will show your mortgage is in default, and you have the BK, not to mention the credit report will list all the addresses you have lived for some time. The underwriter at the bank is going to scrutinize your addresses, your name and run several reports, which WILL show you are in default and pending foreclosure. Also with the BK, you have to wait 4 years to obtain a mortgage. If your home goes into foreclosure, that waiting period is 7 years. What your friend is telling you to do, is coming from his heart I am sure, but its not the best thing for you to do. You sign under purgery that the information you have provided is true. I dont know where you live, but a mortgage for $1600 is dirt cheap in my state of CA...What is the average rent for the same size home in your area of choice? Understanding that your home may not be worth what it was, but you did sign a promissory note that you would repay the debt. Housing is a cycle, they go up and then down...But history shows, over time, they all appreciate in value. I would seek more information about the consequences of foreclosure and see if its really a good idea for you. IRS can impose tax liability since the deficency balance is treated like income, not to mention the lender, depending on your state, can come after you for up to 20 years for the deficiency judgment. Good luck to you!
Being a "friend" your realtor is violating some major disclosure laws and also asking you to commit bank fraud. I understand your situation, and it happens daily across the country. The problem you have is you must disclose where you live, and on your credit report will show your mortgage is in default, and you have the BK, not to mention the credit report will list all the addresses you have lived for some time. The underwriter at the bank is going to scrutinize your addresses, your name and run several reports, which WILL show you are in default and pending foreclosure. Also with the BK, you have to wait 4 years to obtain a mortgage. If your home goes into foreclosure, that waiting period is 7 years. What your friend is telling you to do, is coming from his heart I am sure, but its not the best thing for you to do. You sign under purgery that the information you have provided is true. I dont know where you live, but a mortgage for $1600 is dirt cheap in my state of CA...What is the average rent for the same size home in your area of choice? Understanding that your home may not be worth what it was, but you did sign a promissory note that you would repay the debt. Housing is a cycle, they go up and then down...But history shows, over time, they all appreciate in value. I would seek more information about the consequences of foreclosure and see if its really a good idea for you. IRS can impose tax liability since the deficency balance is treated like income, not to mention the lender, depending on your state, can come after you for up to 20 years for the deficiency judgment. Good luck to you!
The mortgages are included in the BK and do not show on our report at all. We are in WI and renting a house this size would average about $1000 in the area. We did not lie about anything, but we just haven't told them that the houses are ours and the mortgage companies are not able to report the late payments, due to BK laws here, so there is nothing showing the late payments, and as long as we make sufficient payments, we are keeping the Foreclosure at bay, and off of our reports as well. What do I do??? We have to get out of this state and the new house is only going with my income, should we get this house, my husband is willing to stay and sell this house, but it will be a short sale. We wanted to get another house and secured lending before we short sale since that will show on our credit.
The thing is, once the mortgage crash happened, lending has become very stringent. Any bank or lending institution will know that you are in foreclosure, by way of the background during underwriting. They will research your addresses. Lets say you put that you rented your current home in default, or maybe a family members address, the lender will want proof of your rental history. They do this with either cancelled checks, or if the landlord is not a private party, then they can do a writen verification of rent. Your name would show up under MERS, which is the mortgage registration. Even your address entered in a title company profile report, will show you are the owner, and the profile will show anything that has been recorded, such as your mortgage, and any notice of default etc..You may be able to talk to a local bank, one that loans their own money and hold their loans in the portfolio. Your other option would be private money or hard money. Would need 30-35% down payment, and rates are not the best.
Financing a new home with bad credit is very possible. The key is using the right lenders and obtaining a home loan that suits your needs. Many lenders service a variety of bad credit home loans. With this said, getting approved for a mortgage with a low credit score is attainable. Still, buyers should take the necessary steps to improve their approval odds.Because of higher rates, monthly mortgage payments may increase. Having a down payment is the best way to avoid a high monthly payment. Moreover, a down payment may help you obtain an interest reduction.
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