     jonjon (Johnny) | Friday, September 01, 2000 - 07:47 pm 
When I filed for my Bankruptsy, I included my home. At the time, I simply assumed that it would state on the credit report that the mortgage was included in bankruptsy. I am now being told that the mortgage loan as well as the 2nd mortgage will show up as a foreclosure. Does this count as a double negative when it comes to credit scores? Also, in all the tricks of the trade of removing and altering credit report information, is there any way around this if it is in fact true. |
| Christine Baker (Admin) | Saturday, September 16, 2000 - 12:20 pm
I don't think there's anything you can do about the foreclosure. Foreclosures are a matter of public record.
What's REALLY bad is that a foreclosure is MUCH worse than a bankruptcy when it comes to MORTGAGE lending.
If any special circumstances such as MEDICAL problems contributed to your bankruptcy, KEEP all records if you intend to ever buy a home again.
And I don't know what the impact on your scores will be, I ** guess ** they'll be a little lower. |
| jonjon (Johnny) | Saturday, September 16, 2000 - 04:47 pm
Since I have posted this question, I have talked with the credit bureaus and I am being told something different. We were not in foreclosure when we filed Chapter 7. As a matter of fact, we were completely current with payments and the decision to include the home came after we hired a structural engineer to estimate foundation damage. This was just before the actual Chapter 7 Filing, thus, we were able to include the mortgage. The CB's have told me that since we were not really in foreclosure, that the accounts should show up as "included in bankruptsy" and if they did not, we should dispute the entry. Any experience with this? Are they just blowing me off? |
| Christine Baker (Admin) | Sunday, September 17, 2000 - 12:28 am
The lender(s) either foreclosed or they didn't, if they did, it has nothing to do with the bankruptcy. It's a separate public record.
And there should be recorded Notices of Default, additional REAL BAD public records, although not as bad as foreclosure.
What's your credit report say?
Did you sign a deed to grant the property to either of the lenders? |
| jonjon (Johnny) | Sunday, September 17, 2000 - 02:55 pm
I have not bothered to get a copy of my report just yet as the discharge has only just taken place. I thought I would give it a month or two before getting a copy so I could begin the dispute process. As for signing anything, I have signed nothing pertaining to the mortgage. As I said, we were completely current with all payments and I'm sure the Chapter 7 notification was a complete surprise to both the first and second leinholders. So I guess what I am saying is that I have seen nothing pertaining to a foreclosure. I just assumed that the mortgage company would have to go through foreclosure proceedings in order to take possession of the house. As I understand things now, they have assumed all liability for the house as far as insurance, taxes, etc., they also have been notified by both myself and my attorney that we have vacated the house. |
| Christine Baker (Admin) | Sunday, September 17, 2000 - 04:49 pm
That's really, REALLY odd.
Normally people in your situation try to stay in the house as long as possible (at least several months) without making payments.
The lender doesn't own the house until they either obtain title through foreclosure or via a deed from the owner (you) unless you're in one of the States that doesn't use trust deeds and then I think the Court issues title.
Either way, I recommend you IMMEDIATELY contact both lenders to arrange for title transfer WITHOUT the foreclosure or other court action going on your credit. A "Deed in Lieu" is also not a very good idea and may be your only option, still better than public record foreclosure.
This is a very difficult situation due to the lack of equity and two lenders. You should have negotiated with them while making (i.e. FOR) the payments.
I'm not sure what your attorney is doing. At least in California liability and ownership of real estate aren't transferred by sending out a letter.
Unless the lender(s) ACKNOWLEDGED IN WRITING the assumption of liability for YOUR house you might still be liable.
I'd find out what's going on ASAP. |
| Christine Baker (Admin) | Sunday, September 17, 2000 - 04:56 pm
And you posted "This was just before the actual Chapter 7 Filing, thus, we were able to include the mortgage."
Are you saying the mortgages were DISCHARGED and listed on your final list of discharged loans?
What State are you in? |
| jonjon (Johnny) | Sunday, September 17, 2000 - 07:24 pm
Yes, the mortgages were listed as on the final bankruptsy draft. I am in West Virginia. The reason we did not stay in the house was partially because of my attorney and also due to lack of rental houses in our area. My attorney said he likes to file in groups of 8-10 petitions at once. Thus, it was almost 3 months from the time my petition was drawn up and the creditors notified to the actual filing. At the time of the filing, he had said he did not think we would have more than 30 days before the Mortgage company would want us out of the house. With a wife and three children, I did not want to take any chances of having to find a place to rent with little notice since rental homes in a reasonable price range are rare in this area. Thus, a home became available in a good neighborhood and we jumped on it. As for the notice in writing from the mortgage company, I was sent a copy from the MC stating that they were assuming responsibility for the insurance and taxes (this was so I could drop the insurance on the home). I have heard of people negotiating with leinholders and being able to essentially settle upon a price, usually so much on the dollar of what the house is worth, and the MC did not have to bother with trying to sell the home and just wrote off the balance. What do you know about these situations and would it be too late to look into it. The 1st and 2nd balance is 65K. I estimate with the foundation damage, the house is worth 30 - 40K. The engineers want 10 - 15K to repair it and this does not cover damage to the inside walls caused by the foundation. |
| Christine Baker (Admin) | Monday, September 18, 2000 - 12:08 am
Unfortunately, I have no idea how West Virginia transfers real estate.
Have to say that I have NEVER seen mortgages discharged in a Ch. 7.
Since the lender took responsibility for the property, check the public records to see if they're the owner of record. If yes, you don't have to worry about any further public record actions to foreclose. Or, just call up the lender and ask them whether and how they acquired title.
I assume that the holder of the 2nd mortgage got wiped out, unless THEY assumed responsibility for the house. Either way, I think it's too late to negotiate anything, seems like a done deal.
Then again, I have NO idea how this all happened and I shouldn't assume anything. Real estate laws and customs are obviously very different in West Virginia.
The only thing I'm sure of is that I don't like properties with structural damage no matter where they are. |
