Well we are still looking into our Chapter 7 BK but we got a certified return reciept letter in the mail last week, telling us about our 3 options, compromise sale, deed in leau of foreclosure or giving it back to VA? We were originally going to just do a Chapter 7 BK then surrender the home as well. We are moving out the end of December, what do you think we should do? Will having a foreclosure on the home now hurt our chances in 3-4 years to buy another home? I have read so many people are able to get FHA loans at prime rates 2 years after discharge how accurate is this? We are throwing out about 14K in the Chapter 7, to get back on our feet and not having the house note will definitley help! In a few months maybe we will actually start saving some money. Should we just surrender the house? MOst likely it will not sell, the market is very slow, either way we might still owe VA...any advice would be helpful. Thanks
I am not sure if they mean the same thing they were listed two separate but from the way I understand it, for VA we would try and sell it for 3 months or so and if it didn't sell then VA would take it back and sell it probably for less then what is owed, in deed in leau I thought we would turn it over to the mtg company and let them try and sell it, like sign over our deed to them? I hope I am right, we haven't recieved a phone call at yesterday normally they call everyday twice a day, but I think they might start forclsoure since we recieved that return receipt letter they gave us till the 31 to come up with the money. But we are moving out the 29th. What are we going ot do with our keys? Is a foreclosure going to be a harder hit then a BK 7 or are they about the same? Do you think we will be o.k. getting another loan in 3-4 years? Thanks...
Here is what happened to me. In 1998 I was facing the foreclosure of my VA backed home. (Hubby was alkie who blew a ton of money on a gambling binge.) Even though they can foreclose post 90 days, this home was 10 months in arrears. The VA (I would call them if I were you!) told me that if I could come up with half of that, they would take over the note and I could pay the VA. Unfortunately, I was not living in that house at the time, so even if I did have $5K, the VA could not have assisted me. I contacted an atty who had sent me a letter about checking out my legal options prior to the foreclosure. I had filed a BK7 in 1993 due to an expensive divorce and custody battle so I thought BK was not an option. He corrected me. I could still file a BK13 and save the house. Long story made short. The atty was a bad one. He screwed up and they foreclosed anyway. (Ultimately, I won a settlement from this atty.) So here I sat with a 93 BK7, a 98 BK13, a VA repo/foreclosure, mega baddies on my bureaus... judgements, tax liens, the whole gamut. I found this site in 2002. I followed the advice here and cleaned up my bureau. I still have some remaining derogs that will fall off in 1/05. After following the advice here, I qualified for a FHA mortgage and closed 3/03. I am proof that it can be done. I am also lucky. Because the market in Richardson, TX was good at the time of the foreclosure, the house sold for more than was owed. I was not left with a VA indebtedness. I have my eligibility back. If you are left with a VA indebtedness, you cannot get another VA backed loan unless you pay that back. They will never come after you for it otherwise. I hope that answers your questions.
You don't have much time, but you might try looking for "bandit signs" or "snipe signs" in your area that advertise "avoid foreclosure" or somesuch. Or check the classifieds. Or ask a few real estate agents. IMHO, it would be better to have a local investor who is experienced in "short sales" (the compromise sale) negotiate with the mortgagee to buy the property. You want an experienced one. Some are just starting out, and they'll waste valuable time learning ropes the longtime folks probably already know. You might get some cash out of it. The TLs would probably look better. The investor may be able to help you secure better housing than you would otherwise find, and may be able to help you with moving, and other practical matters you're facing right now. Some are predatory. But the best of them are problem-solvers, and while some of the problems they will solve will be the mortgagee's, most of the problems they solve will be yours.
Well we do not want to keep the house, that is the main reason why got into the situation, well and our carelessness in spending money, but my main question is, how much worse is a BK compared to just a foreclosure, or doesn't it matter? Of course they are both going to hit hard, but having two good tradelines left that are auto, and a furniature credit will give us a boost with rebuilding. Are any laws changing 1 Jan to where it will be harder to file Chp 7 I heard this was coming up but not sure when?
A short sale is better than a foreclosure is better than a BK, especially if the buyer (investor) is able to negotiate the TL on your behalf to "Paid" and avoid any mention of deficiency.
so do you suggest contacting a realtor to do the short sale? Should I contact VA to do the short sale, either way we are doing a BK 7. I just wanted to know for reasons in a few years when we want to purchase a home again they will see BK 7 on our reports no matter what, will it make a difference to the lender if their is a foreclosure, because if we just surrender the house, it would be just like one bad at one time on our reports and we can start rebuilding in 6 months, have no lates and nothing derog after our discharge in a few months. I heard in a couple years we will have a good chance to get a FHA if we have a clean record from our discharge.
Realtor in TX is probably going to charge you around 6%. You might get one for less, but they won't be motivated for a short sale. If you are doing the BK7 either way, it seems it would be better to include it. From what I've read here, BK is an all or nothing hit on your cr's so why aggravate yourself with trying a short sale? Something you keep saying me is bothering me. You keep mentioning the furniture and auto, as not including them to have some good tradelines. I may be wrong, but you are going to HAVE to include all your debts in the 7. You can (under certain unknown to me circumstances) continue to pay those debts and keep the items. But, from what I've read, I believe that they are prohibited from reporting anything (good or bad) on your cr's as that would be a violation of the BK stay. I would check on that further.
A short sale is better than a foreclosure is better than a BK, especially if the buyer (investor) is able to negotiate the TL on your behalf to "Paid" and avoid any mention of deficiency. *I had to do a compromise sale in 1998. The mortgage company put a message in the TL that says "Account legally paid in full for less than full balance". And its still a bad derog, its the first thing listed on denial letters when I apply for credit and get turned down, because its the only big derog I have. The only other derog I have is a $200 medical bill in collection.
well they are secured debt and according to my attny they can not include them in the BK, not that I want to. does that sound right? a seven is all unsecured debt right?
You may want to call up some realty offices and banks in your area and ask if they can refer you to any "private" investors interested in your situation. Also, check your newspapers under investments, some investors advertise here. In my area, I have seen several investors seeking these type of properties in the Pennysaver, for whatever that is worth.
yeah but I have heard alot of those things are scams in the paper, and penny saver, I would not want to turn over to my house to have someone assume my loan and pay me for it then have it come back on me anyway. I just think that is a no win, situation...if I find one that is sincere, how does it work? What happens?
If the investor assumed your loan, the VA, they would be primarily liable for the debt with you as secondarily liable, unless the VA gave you a release. If no release, there is still a risk to you if the investor defaults. But the investor may have their own financing in play. They may have a better rate loan than your VA and possibly not want to assume. If you are looking at the best case scenario for your credit, an investor is it, but yes, that does come with some risk. What is the rate on your VA? BTW, I think a VA takes about 30 days to assume. You just call the lender up and have them forward the paperwork over. But, it is likely the investor may already be pre-approved with their lender.
my rate for VA 5.75, they would just assume the note basically? but if they default they come after us? I guess I am not understanding the process...but since we are doing a BK no matter what, I almost would rather just surrender it and be done with it, any idea how everything goes when the MTG company decides to sell it or what happens after foreclosure, the market is o.k. right now and would they try and get what is owed or basically in a forclosure do they not care?
