Discussion in 'Credit Talk' started by Shantel, Jun 25, 2001.

  1. Shantel

    Shantel Well-Known Member

    If you've actually HAD a foreclosure or have definate knowledge, please respond:

    I had a house foreclose in 99 (long story). Anyhow, on my CRs (TU and Experian) it's showing that I'm past due $3k, but the foreclosure is complete. How can I be past due when they've gotten the house back? I believe this to be wrong. How can I get them to AT LEAST show that I'm not past due. (Of course, I want the foreclosure deleted and TU and Experian came back verified). It's been deleted from my Equifax.

  2. dlo64

    dlo64 Well-Known Member


    Good question. First of all was there a deficiancy between what the bank sold the house for and what you owed? Second, has the house been sold yet by the bank or does the bank still hold it? Third, did you file a bankruptcy to wipe out the deficiancy?

    My BK was filed and discharged last year. We included the house in the BK and let it go into foreclosure. The bank has taken forever to foreclose and it is currently going through the foreclosure thing. If there is a deficiancy and you have not filed BK, you are responsible for the difference between what you owed and what the bank sold the house for. If you file or filed BK and included the mortgage, the BK wipes out the difference.

    Since our house is still in the foreclosure process, I cannot tell you how it appears on a credit report post foreclosure. This may be something you need to dispute.

    If I am incorrect about any of the above, please enlighten me. Hope this kinda helps.
  3. Crdt Dfnse

    Crdt Dfnse Well-Known Member

    Foreclosures take place under certain parameters, dependant on in what state the subject property is located. Some states (off-hand I believe it to still be about 37) have what is known as a one-action rule; meaning they can either litigate for full recovery OR foreclose; they cannot do both. Correspondingly, some states are judicial in that the repossession must take place through a court action. Many judicial states allow a deficiency balance to be sought, whereas non-judicial foreclosure states generally do not.

    I suspect (and itâ??s pure speculation on my part, at this point) that your CBR hit probably results from a deficiency (in agreement with dlo64). In other words the 3-grand showing due is the difference between final resolution, and all associated fees and costs. Having it removed may not be successful permanently, because many mortgage lenders are now resubmitting after deletion(s). But donâ??t let my opinion stop you from trying to dispute, as the odds are still with you. Nonetheless, itâ??s legit information (based on your post) so take that into consideration?

    If you need anymore help regarding this, please let me know.
  4. Shantel

    Shantel Well-Known Member

    Thanks for the info. I don't believe it's a deficiency (but I could be wrong). That was how much I owed (plus court, etc) fees (I's been so long now, I don't even remember). The house was FHA insured, so the mortgage co. definately got what was owed. But if what you guys (gals) are saying, then it could be unrecovered court costs, fees, etc.

    I didn't file bankruptcy. In actuality, I have been working with HUDs Inspector General regarding fraud around the purchase of my house. I talked with the office and the person told me it was possible that HUD might sue me for the deficiency, but said because I was helping them try to get the bad guys then they would take that into consideration.

    So the question is, how do I go about trying to fix this foreclosure thing? They haven't reported anything since 99 when the foreclosure was completed.

    I was served, etc. It was judicial. Meaning, I didn't give it back (non judicial)
  5. KristyW

    KristyW Well-Known Member

    I used to be a mortgage banker, just so you know where I am coming from.

    Just because a home is FHA insured, doesn't mean that the mortgage company got its money. The house could have been underinsured, or in order to resell the property they had extra costs to fix it up, or it sat on the market for a long time before it was resold.

    If you were served, are you saying you had a judgement? Is a judgement on your report?

    In any case, even if you pay this off, you will still have the Foreclosure on your report. But to purchase another home, if you have a judgement, they will require you to pay it off. It's a catch-22.
  6. Shantel

    Shantel Well-Known Member

    No, I don't have a judgement. I guess I'm still learning the ins-and-outs of this whole thing.

    I know that it was overappraised and from what I understood, FHA was going to go to court and contest the insurance because they (and myself) had been defrauded in the process.

    It was a mess. So then Kristy, how should I go about working on this? Like I said, it was verified on TU and Experian.
  7. dlo64

    dlo64 Well-Known Member

    Speaking of overappraisals, does this happen often? I am just wondering how many properties get overappraised just to push the loan through.

    My mortgage that is in the process of being foreclosed upon (had to let go due to the property taxes doubling and loss of income due to medical condition) was also an FHA. We paid $160,000 for the house, the house appraised at $162,000 and we owed $148,000. It is a newer subdivision (6 years old) and the builder may finally be out of there this year or the beginning of next year. In other words there is still competition with the builder. Right now the market values indicate that listing prices of comparables range from $138,000 to about $145,000 (my house was loaded with just about every option that could be put in the house). So whether it's the lender or the government, they will be lucky to get what is owed on the house.

    The reason I ask about overappraisals is that they are supposed to in effect protect the lender. I now kinda wonder if maybe our home was overappraised to push the loan through when maybe the value wasn't there to begin with. This does neither the lender or borrower any good.
  8. Nave

    Nave Well-Known Member

    When I got my house I had several appraisals, 1 from the mortgage company, one from the city for tax purposes, and I had one done to determine what I was getting.

    I assumed the mortgage company would be the lowest appraisal since they are lending the cash. The Tax appraisal would be the highest so that they can collect more cash. And mine would be the most accurate and cost me the most since I was paying the cash. It's all about cash. I was correct, that was how the 3 ended up, not by much but the tax appraisal was the most outta whack.

  9. bbauer

    bbauer Banned

    Did they actually go through with the forclosure process?
    Is it now a matter of court record?

    If it is, in most states, there is a required number of appraisals demanded by law before a house can be foreclosed upon.

    In most states, I think that the law requires 3 appraisals.
    1 from the sheriff's office and at least 2 others.

    In the event those appraisals were not properly carried out,
    this could end up being one of the reasons for you to go back into court after the sale of the property and file complaint against the mortgage company.

    The end result could be, if other errors can be found, that you get your house back free and clear.

    I am going to start that process just after the 1st of August and should have my 2 houses back in a few months.

    I will get all their courtroom and procedural errors together and file quiet title on the properties for starters.

    should be fun no matter what happens
  10. Shantel

    Shantel Well-Known Member

    I don't know if that happens often but I will tell you that if was a very big scam that was occurring where I lived. There were 300+ FHA mortgages that were pulled for fraud (mine being one of them). The mortgage broker, appraiser (who was NOT an FHA appraiser), real estate agent and seller were all involved. The appraiser would overappraise houses then use THOSE houses as comparables.

    Many of the people who bought the houses ended up being foreclosed on because they could not make the payments. In some cases, houses in my neighborhood were going for $80k. Okay, that might not seem like much. My house was appraised at 69.9k. The house directly across the street with a full basement (and a kitchen) and a 2 car garage sold for 50k. So as you can see, that was a problem.

    If I had stayed in that city, I would have been able to make the payments, but when I left (not even a year later), I couldn't sell it because it was overpriced for the neighborhood. Hence, the foreclosure. I was told I could ask to give it back but that they didn't consider moving for a better job a valid reason to accept me giving it back. I didn't find out about the HUD investigation until the house had already gone into foreclosure.

    I don't trust anyone in the housing industry at all. I went on to real estate school, so that I can be an educated consumer. I trusted them because I felt with FHA, the government would protect themselves, but in my case, the appraiser that was SUPPOSED to be from FHA was NOT. I don't know HOW they got the loan pushed through. But it's been a mess.
  11. KristyW

    KristyW Well-Known Member


    I don't honestly know what you can do to get the foreclosure off, it is real, and most likely easy for the CRA's to verify. If you don't have a BK, though, you should be able to qualify for a home with A+ after 3 years IF the rest of your payments to loans, credit cards, etc, have been on time.


    I left the business because it was so back-stabbing and dishonest. Everybody works on commission, so it is tempting for appraisers to make the numbers look like the loan officer wants - otherwise the loan won't fund, and the appraiser (especially someone new in the business) might not get the loan officer to use them again. The mortgage bankers are aware of this, and they typically have an appraiser on staff to do a little homework - pull a few fast comps to verify that the appraiser did a resonable job. Also, some companies won't fund loans if the loan package contains an appraisal from a non-approved appraiser in the local area.

    In other words, this is very common.
  12. Shantel

    Shantel Well-Known Member

    Hmmm....Bill, that's some interesting information.

    If you get the house back, will your payments be what they were before they foreclosed on them? Or what?

    Aside from using them as rental property, WHY would you want to get the house back? I have a brother who needs a house....a father too and both of them could live there. It was a fine house...very sound.

    Is it possible for you to email me regarding what you're doing so I can see if it would be beneficial for me to do the same?

  13. Crdt Dfnse

    Crdt Dfnse Well-Known Member

    I seriously doubt, in the far extreme, that the poster you refer to will get anything back! Once a foreclosure is completed, whether by judicial or no judicial means, itâ??s an extremely speculative move trying to get it back by litigating. Whatâ??s more; errors alleged to have contributed to the repossession must be of a grievous nature, so much so that oneâ??s case is relatively cut & dry. Yet Iâ??ve never ever seen a foreclosure reversal happen, having foreclosed on millions worth in property nationwide for many years.

    Donâ??t waste your time with blue-sky theories that are bound to fail. Because irrespective the appraiser misconduct, I havenâ??t seen anything youâ??ve posted that would remotely sustain a reversal consideration; not alone a trial. But please donâ??t take â??myâ? word for it, consult with local Real Property counsel (whom Iâ??m certain will support what Iâ??ve stated).

    Believe me when I tell you, some court wars are won by attrition and others by substance. If one goes up against the relative Title Company (TSG provider) hoping to get a house back â??free and clearâ? (yeah, right!), they better be prepared for a long and expensive conflict. Again, without VERY substantive grounds the chances of re-acquiring a repoâ??d home are micro-thin.

    IMHO, youâ??re clearly much better off focusing attention toward present credit issues.
  14. Shantel

    Shantel Well-Known Member

    I'm not picking anyone's info over any others. I want info. I'm intelligent enough to decide if it's worth my time to mess with. On the other side, I will continue to tackle the issue of it being on my CR and what it's doing to me.

    2 years out, I already have B+ credit and I have plenty of information for any potential lender to settle their "nerves" around lending me money again for a mortgage.

    Nonetheless, thank you Anthony for your view. No offense but I don't particularly trust anyone on this board for what they say until I can see it myself and make a determination.

    What Bill is saying doesn't necessarily sound like anything I'm willing to do, but I'd sure like to see to determine that for sure. I'm from the "Show Me" state! ;-)
  15. Crdt Dfnse

    Crdt Dfnse Well-Known Member

    Hay absolutely no offense taken. Personally, I believe itâ??s in your best interest to be a bit skeptical and, yes, check out everything before applying a particular technique. I only mentioned what I had because some folks (perhaps not as savvy as yourself) may have viewed the subject comments as a REAL (and easy) possibility, and I wasnâ??t certain if you fell into that category initially.

    In any case, it appears as though youâ??ll do whatâ??s right for your particular situation. [;-)
  16. dlo64

    dlo64 Well-Known Member

    Good points all.

    The next time I go to purchase a home would it help at all to hire my own appraiser? I of course, never ever want to go through this again! However, I do not want to purchase a home that will depreciate either. I think that it just might be well worth the cost to us in the long run.

    Also, from what I am gathering from this is that it would be safer to deal directly with a bank rather than a mortgage broker. Boy, I am probably opening a can of worms here. Ironically, out of the three properties we have owned, the first two we financed directly from a bank. This was the first time we had ever gone through a mortgage broker and look what happened. I am not trying to say that mortgage brokers are all bad as I know each field has their good and bad apples. I also am not saying we were not at fault ourselves. I really don't think any bank would have let this loan go through if we had dealt with them directly. I just want to better protect myself in the future.
  17. KristyW

    KristyW Well-Known Member


    It will be a waste of your money to hire your own appraiser, as mortgage bankers will insist that you use one a) ordered by the loan officer and b) one approved by the mortgage company. The appraiser even puts on the top of the appraisal that it was prepared for XYZ mortgage company.

    Your question of whether to go with a broker or banker is a good one. I wrote a whole article on it on my site, but here are the main points.

    A broker is probably your best option when:

    o you have less than perfect credit
    o are self employed (and can't prove your income)
    o just switched professions
    o or have a high debt load.

    Mortgage brokers can get you a loan when the banks just aren't interested in the hassle. But you will pay more in both fees and interest rates for getting your loan through.

    A bank may be the best option if:
    o you have top notch credit
    o steady job/work history
    o low debt loads
    o are self-employed, but your last 2 years of income tax returns easily prove your income.

    Keep in mind: a broker may have competitve rates/fees as compared to a bank, so don't necessarily rule out a broker even if you'd qualify for a bank loan.

    Here's the URL:
  18. dlo64

    dlo64 Well-Known Member


    I understand that the loan officer and bank will want to use the appraisal ordered by them. What I would be trying to avoid is having the home overappraised. If they both come close that is good. But, I guess I am a little shell shocked from this foreclosure and the amount the house was appraised for when we purchased.

    I would think that an appraisal ordered for a loan being funded by a bank would probably be realistic as banks tend to be more conservative, plus they would not want to put themselves in jeopardy of a loss if the loan defaults. I would rather the house not appraise out instead of an overappraisal just to push the loan through.

    All in all, I think I will try to finance next time through a bank and one that holds on to their loans. Before this major disaster we had our loan at a local bank. It was nice to go in and make the mortgage payment and be able to get information easily.

    Thanks for the info.
  19. bbauer

    bbauer Banned

    You have my email address already.
    If you wish to speak with me by email, send me something so I can pick up on you addy and reply to it.

    Anthony, who also likes to post under the name of Heckler
    which is very fitting for his style is always trying to stick his two bits in, so it's better by email.
  20. Crdt Dfnse

    Crdt Dfnse Well-Known Member

    Although a bit off-topic (folks forgive me), would you agree that dealing with a broker also depends on oneâ??s ancillary objectives? For instance, Iâ??m in the process of building a ranch (for dogs not horses), and am purposefully using a local broker over family (who are in Executive Management at BOA). One reason being is that the broker is more familiar with construction and L/T rollovers, plus local requirements and contractors.

    Candidly, credit and money arenâ??t issues with us but completion of construction under certain conditions are (despite the deal I could get through BOA). Which is primarily why I opted to go with the local broker rather than family.

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