QUESTION
If we do walk, will the foreclosure go against our credit or will the bank possibly allow us to do a short sale?
Asked on Feb 08th, 2016 on Bankruptcy - California
More details to this question:
We filed in 2007 and discharged in 2008. We have never missed (or been late) on a mortgage payment since a loan modification in 2011. We now want to move (kids are gone). We don't want to just walk but we are also under water. I want to do the right thing, but we are in essence paying very high rent since the bank won't consider a refi since we did not reaffirm. Thank you for any advice.
7 ANSWERS
A short sale is your best option. Contact a real estate broker who specializes in short sales.
Answered on Mar 14th, 2016 at 5:45 AM
The answer your question will depend on how the mortgage company chooses to foreclose. There are two ways they can proceed under Nevada law, by judicial process and by non judicial process. By judicial process, the foreclosure will appear on your credit report as a public record. By non judicial process, the foreclosure will not appear on your consumer credit report, but every other lender will be able to easily discover the foreclosure. Thinking on your own has left you with limited options, A professional will be able to advise you of a wider range of opportunities.
Answered on Mar 10th, 2016 at 3:28 AM
A short sale would be better for your credit than a foreclosure, so definitely try that first!
Answered on Mar 10th, 2016 at 3:26 AM
Bankruptcy Attorney serving Madison, WI
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Richard B. Jacobson & Associates, LLC
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Consult your bankruptcy lawyer. If you did not reaffirm the debt, then ordinarily you would not owes the bank anything upon a surrender of the real estate. However it appears that you refinanced The mortgage loan. So depending on what the new promissory note says, you leave be liable for any deficiency. See if you can work it out with the bank so as to avoid being liable.
Answered on Mar 10th, 2016 at 3:26 AM
2 Awards
Yes, both a foreclosure and a short sale will be reflected on your credit. Whether the bank allows a short sale is very fact specific. You can list the house for sale, find a buyer and tender the proposal to the bank to see if it will entertain the short sale. If not, you can walk and they can foreclose.
Answered on Mar 10th, 2016 at 3:25 AM
Commercial & Bankruptcy Law Attorney serving Powell, OH
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Ronald K. Nims
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Debts discharged in bankruptcy usually don't report anything to the credit reporting agencies other than "Bankruptcy". Check your credit report to see if the lender is reporting the debt currently. If it isn't reporting, then it won't start when you walk away. What can screw up your credit is that the property is in your name, so if you walk, the bank will sue you to get title so they can sell the property. It's a better plan to negotiate a deed-in-lieu. Saves you the hit on your credit report and saves the bank the cost of a foreclosure.
Answered on Mar 10th, 2016 at 3:25 AM
A short sale won't cost you anything and is less damaging to your credit.
Answered on Mar 10th, 2016 at 3:25 AM