Asked about 1 year ago - Medina, OH
FlagWe filed for Bankruptcy in 2005 and our current home was included in the bankruptcy. We have been living in the home and making the payments since then. However, last year we fell 2 months behind and have not been able to catch the payments back up. We dont think we can afford to make the payments any longer and are thinking of letting Wells Fargo foreclose. We have tried to work with them on a loan modification and they have denied us. Will we be able to get a Home Mortgage loan if we have a forclosure? What if anything can they come after us for since the loan was never reafirmed? Will the foreclosure be on my credit report since the loan is already included on my bankruptcy?
Yes, it will go on your credit report if the mtg co notifies the credit agencies. Yes, it will be tough getting a home mtg loan with a foreclosure on your record. I would suggest you become proactive. Contact a lawyer in OH who is an expert in foreclosure law and offers free consultation. You may need to sue the mtg co first to get leverage. A lawyer in OH can suggest some ways of doing this. At this point you have no leverage and are at the mercy of the mtg co. Don't give up. You have come too far in life to give up. Good luck!
I just want to add that since you did not reaffirm the debt, the mortgage company can only foreclose to take the house away. It cannot come after you for any deficiency judgment.
Whether you will be able to take out a mortgage in the future will depend on a number of factors including (but not limited to) your credit score, income, down payment amount, and the potential foreclosure here. Some lenders have policies that at least three years must elapse since a foreclosure before they will lend. You will have to work hard to repair/rebuild your credit post-foreclosure and save for a healthy downpayment.
There are some indications that the housing market is starting to rebound, I have a friend in real estate law who had 18 closings scheduled last Friday. She told me that last year they were happy to have 18 in one month. My point is... can you sell this house and avoid foreclosure? That is one avenue to investigate anyway.
I disagree with my colleague. If you did not reaffirm on the loan then the mortgage company should not currently or ever in the future be reporting on your credit. This includes reporting about monthly payments and whether a foreclosure occurs. You can confirm whether I am right by pulling your credit report.
So in essence, if the property forecloses your credit score will not be effected because there will be no reporting. Whether you can qualify for a new home mortgage at this time is a bigger question. With lending requirements still being very tight, qualifying for a home loan is about more than your credit score. It doesn't hurt to contact a lender to find out. The worst case scenario is you will get a "no".
Given that the problem that has prompted your question is that your income is struggling to the point of putting you into foreclosure, I would suggest your first stop be to visit a financial manager or financial counselor to assess what you can afford.
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