I'm currently in the rebuild stage, been pushing/hovering around 660-680s the last few months. Mainly due to quite a few inquiries for CCs and Auto Loans. However, I received mail the other day from my old mortgages (1st and 2nd). I thought they were bugging me again and I almost threw it away. I read it and I had 2 separate letters, 1 for each loan saying they have forgiven my 1st and 2nd loans and would remove the foreclosures to all 3 agencies.. and I almost jump through my roof...but rather than get too excited and run and try to get a loan. I figured I'd slow roll it and read up some. I found some information here but just want confirmation on my situation. I would love to purchase a home again and the owners of the house I rent would love to sell it to me. We've went back and forth a few times but I told them my situation and they understood and let me stay as a renter rather than try to put the house on the market. I told them as soon as I could purchase a home, I would like this one.
I know I read a few areas here that it would be best to prepare for a home loan way in advance. Which I was planning to do in the next month or so. We moved out of our old home almost 4yrs ago. It didn't foreclose until last may though 
5/2014 Foreclosure date...so I figured after that I couldn't get a loan until 5/2016.
Here are our questions:
1. With this forgiven, is it truly forgiven and not on our credit report?
2. If it's forgiven and shows as a negative on our CR, do we ask for deletion on our CR?
3. Being forgiven should we "theoretically" be able to pursue a home loan?
4. Should we shop now or maybe wait until 11/2015 to shop for a better rate?
5. We pay quite a bit for rent and wondering if waiting for 2015 is worth waiting just for the better rate? (we don't intend to pay for 30yrs, we want to pay 10-15yrs, max 20)
6. If we pursue and seek a loan officer, should we just let him know how much we have to put down or a % of the home?
Here is our situation:
BK13 - discharged March 2014
Foreclosure Sale - 5/2015 (moved out 7/2011)
Gardening with at least 5 inquiries on CR
Scores - 660-680
Only Negatives on reports are BK and Foreclosure
2/2015 - received 2 letters from old mortgage company saying both loans are forgiven and they will report that to all 3 CRA
2 recent Car loans - 1 acquired 5/2014, 2nd auto loan 1/2015. We will pay the 1st one before trying to purchase the home.
Debt to income ratio is very low debt.
We are really ready to buy a home ASAP, but since we're in the home we want...we want to do it right or at least as right as it can be to get us owners of this home.
Also we have been members of NFCU for years, but never got a CC or any loan. We tried after BK and have been unsuccessful in several attempts. I've thought of leaving them, but have read so much good here and want to wait it out until things get better...hoping they treat me better. We've never went negative in our account with them and since we never had a loan or CC we have never had a late payment. We did get a secured CC with them 5/2015 to start rebuilding though. Always paid on time and often.
Thanks in advance!
~DaUs
DaUsMsB wrote:I know I read a few areas here that it would be best to prepare for a home loan way in advance. Which I was planning to do in the next month or so. We moved out of our old home almost 4yrs ago. It didn't foreclose until last may though
- Was your mortgage discharged in your CH13? Or did your Ch13 payment plan just allow you to not pay your mortgages?
Here are our questions:
1. With this forgiven, is it truly forgiven and not on our credit report?
- The only way to really know for sure is to get your CR from all 3 CRAs and check it yourself
2. If it's forgiven and shows as a negative on our CR, do we ask for deletion on our CR?
- Worth a shot, you could send them copies of the letters from the mortgage co. & ask for deletion
3. Being forgiven should we "theoretically" be able to pursue a home loan?
- Yes, if the foreclosure is removed from your CR mortgage lenders won't know about it and it shouldn't be an issue
4. Should we shop now or maybe wait until 11/2015 to shop for a better rate?
- No, most economist believe rates will be going up, Fed Reserve is expected to raise interest rates in June, mortgage rates are already higher now then they were in January, altho not by very much
5. We pay quite a bit for rent and wondering if waiting for 2015 is worth waiting just for the better rate? (we don't intend to pay for 30yrs, we want to pay 10-15yrs, max 20)
- Mortgage payment are almost always better than paying rent. Real estate generally appreciates, and mortgage interest is tax deductible if you itemize.
6. If we pursue and seek a loan officer, should we just let him know how much we have to put down or a % of the home?
- Always a good place to start, the amount of down apyment determines the type of loan. And the type of loan also determines the waiting period after BK and/or foreclosure. For a conventional mortgage (at least 20% down), Fannie Mae, the large governmental lender/buyer of mortgages, changed their guidlines last year so that the waiting period for a new mortgage is 4 years from the BK discharge, not any foreclosure. For a FHA loan (less than 20% down, as low as 5% down), the waiting period is 2 years from BK discharge, however if there is a foreclosure it is still 3 years from foreclosure.
Thanks for the reply and details Dave!
Our 1st mortgage was discharged. I forget exactly what the deal was with the 2nd, they just said I couldn't do both for some reason...or it was highly likely I'd be able to get the 2nd. So at least 1 should be discharged and the other Foreclosed. Looking at my credit report, both loans showed foreclosed. I pay for 2 of the 3 CRA's just to keep up with everything. Now that I'm getting Credit Cards, they are also pulling. So I should be able to see when it comes off. I just received the Forgiven letter recently, I was going to give them 30-45 days post their letter date. Which I just looked and that date was 1/28/2015.
2. If it's forgiven and shows as a negative on our CR, do we ask for deletion on our CR?
- Worth a shot, you could send them copies of the letters from the mortgage co. & ask for deletion
*Reply from DaUs - That's a good point, I will scan and save those in pdf format today and check reports in a few days...then dispute.
6. If we pursue and seek a loan officer, should we just let him know how much we have to put down or a % of the home?
- Always a good place to start, the amount of down apyment determines the type of loan. And the type of loan also determines the waiting period after BK and/or foreclosure. For a conventional mortgage (at least 20% down), Fannie Mae, the large governmental lender/buyer of mortgages, changed their guidlines last year so that the waiting period for a new mortgage is 4 years from the BK discharge, not any foreclosure. For a FHA loan (less than 20% down, as low as 5% down), the waiting period is 2 years from BK discharge, however if there is a foreclosure it is still 3 years from foreclosure.
*Reply from DaUs - Ok, so I'll wait for the foreclosures to drop off CRAs and pay off my other car and go from there. So is it 2yrs from BK discharge for all BK's? I thought it was only 2yrs later if there was a foreclosure I sort of remember reading on this for our Ch 13 last year. Our discharge was 3/15, but our BK shows to be going to drop off 11/2015.
I forgot another question I had...does anyone have a recommendation of a Home Loan Officer or company that is BK friendly and easy to work with? We're not looking to buy tomorrow, but it would be nice to be ready this year sometime. All these hoops we've all had to jump in recent years with a smile is getting old...i just want to be back on track.
