QUESTION
Which option is better for us as we would like to buy a home in the next couple of years?
Asked on Aug 15th, 2014 on Bankruptcy - Idaho
More details to this question:
Filed for Chapter 7 in October 2012. Discharged in January 2013. Did not reaffirm our mortgage. Continued making mortgage payments to stay in the home. Have struggled the past year due to my commission and market downturns. Credit has improved but have struggled to make the mortgage payments the past 5 months. A deed in lieu of foreclosure, a short sale, or a standard foreclosure (and let the sheriff give us a vacate date)? Thank you for your help - we have no BK attorney (could not afford one).
8 ANSWERS
Call a good mortgage broker.
Answered on Aug 19th, 2014 at 6:08 PM
Commercial & Bankruptcy Law Attorney serving Powell, OH
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Ronald K. Nims
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A foreclosure is perhaps the worst thing to have on your credit record when you're trying to buy a house. While both a deed in lieu and a short sale will appear on your credit record, neither is as bad as a foreclosure. List your house for sale, generally, lenders aren't interested in either a deed in lieu or a short sale unless you've tried to sell it and pay off the mortgage.
Answered on Aug 19th, 2014 at 6:03 PM
Debt Settlement Attorney serving San Diego, CA
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Law Offices of Kathryn Tokarska
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I assume that you would be looking to finance the next purchase. The best people to ask this question are real estate mortgage brokers. You may want to check with several since a broker may work with certain number of lenders. They are in the best position to know what types of programs are available at any given time and the standards for qualifying for a particular program. The only route I would avoid for sure is an eviction. You are better off moving out voluntarily rather than being forced out by the sheriff. Landlords do not look kindly upon eviction and therefore it would greatly decrease your chances of finding something to rent in the meanwhile.
Answered on Aug 19th, 2014 at 3:08 PM
Would your house be affordable if your interest rate went down a few percentage points or if the payments were spread out over a longer period of time? You ought to contact your mortgage company to see if a loan modification is possible. If not, all of your options will hurt your credit. Short sale is least damaging to your credit, deed in lieu is, surprisingly, most damaging.
Answered on Aug 19th, 2014 at 12:03 PM
A foreclosure is as bad a black mark as a bankruptcy on your credit report, so if you can do the deed in lieu of foreclosure or a short sale, either one would be better than a foreclosure. It may still be difficult for you to get another mortgage for several years no matter what you do, however, so be sure to explore all possible options for a loan modification to make your current home more affordable. Your mortgage lender is required to inform you of all available programs for mortgage assistance.
Answered on Aug 19th, 2014 at 9:32 AM
Complex Litigation Attorney serving Costa Mesa, CA
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Thomas Vogele & Associates, APC
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First, your bankruptcy will stay on your credit for ten years so buying a home in a couple of years is probably a stretch. In addition, if your income is variable, committing to a fixed payment like a mortgage is not ideal. Since you did not reaffirm the mortgage, call up the bank and tell them you are interested in their cash for keys program. Make sure they transfer title from your names to the bank so you get off the hook for taxes, etc. Good luck.
Answered on Aug 19th, 2014 at 5:27 AM
Contact the mortgage company to see if there is any way to work with you. Try to short sell the place or modify your loan. If you give deed in lieu of or short sale, make sure mortgage company will discharge any deficiency.
Answered on Aug 19th, 2014 at 5:21 AM
bankruptcy Attorney serving Paul, ID
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Paul N. J. Ross Law, PLLC
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Don't go out of your way to assist the mortgage lender, especially if they are not willing to assist you with a modification. Only do a short sale if you stand to gain something. If you allow a standard foreclosure then you may live for a number of months virtually rent-free. Save your money and leave your home before the foreclosure date. Your facts will depend on equity and many more. Visit with an attorney regarding your options rather than only general comments that can be made here.
Answered on Aug 19th, 2014 at 5:12 AM