Deed in Lieu of foreclosure was over 7 years and no longer on credit report. Credit score is 802. Applying for a new mortgage and was asked if foreclosure or deed in lieu in past 7 years and answered no, but then I was also asked if we have "ever" had a foreclosure or deed in lieu. Is this something we will always have to disclose? I thought after 7 years and not on credit that we did not have to disclose it any longer.
For certain high value loans, such as mortgages, the 7 year rule does not apply i.e. the mortgage company will probably see it. Check with the FTC on credit. That's how it used to be at least. They will also most likely discover the foreclosure listed on public records and it may show up in the title search. I think the better strategy is to be up front about it, be honest on the application, and see if it makes a difference. Getting a mortgage is about shopping for the best deal, and even a quarter point of interest means thousands of dollars. Maybe someone else won't even ask about the deed in lieu.
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I agree; it's always better to be up front. But this is not even about "disclosure." This is about mortgage fraud. What goes on one's "credit report," or is taken off, has nothing to do with filling out a loan application - which is asking about FACTS - not about what is on some 3rd party "report." You might trying avoiding the question, but if you answer, you had best tell the truth.
See, if they had NOT asked, THAT would be a "disclosure" issue. But here, you would have to affirmatively misrepresent the facts on your application (and say "no") to answer the question the way that is most favorable to you. And, if the bank relies on that statement to issue the loan, you could be in trouble if they find it. Word to the wise.
Hope this helps.
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If the loan application asks if you've ever had a foreclosure or deed in lieu, then you must answer yes. Otherwise, you are not being truthful in the application and that may cause more problems than it's worth.
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