question about not reaffirming

[gshephlvr]

I had my mortgage discharged in my bankruptcy in june of 2010. I never reaffirmed my mortgage but continued to make my payments.  I would like to buy a new home by the end of the year by doing a deed in lieu of foreclosure.

My question is when I apply for a new morgage will the do a title search on my discharged property or only do a title search on the property I am buying. I am worried after hearing horror stories about how long it takes to get a name off a title during this process  and truthfully wondering if I don't have to even mention this property any longer.

[StartingOver10]

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@gshephlvr wrote:

I had my mortgage discharged in my bankruptcy in june of 2010. I never reaffirmed my mortgage but continued to make my payments.  I would like to buy a new home by the end of the year by doing a deed in lieu of foreclosure.

My question is when I apply for a new morgage will the do a title search on my discharged property or only do a title search on the property I am buying. I am worried after hearing horror stories about how long it takes to get a name off a title during this process  and truthfully wondering if I don't have to even mention this property any longer.

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You do have to mention the property when making an application for the new mortgage. You actually have to submit to the mortgage company a full copy of your BK petition plus your discharge plus a copy of the deed showing the property went back to the bank in addition to the standard paperwork the bank requires. The new lender checks everything with the public records (cross checks).

If you don't mention it, it is considered mortgage fraud. You don't want to walk down that road.

[0REDSOX7]

Please note that many lenders consider the date of deed transfer as when to start the clock for new mortgage eligibility.

So, say you were discharged in 2012. An FHA loan would make you eligible in 2014. If the deed to your current house wasn't transferred out of your name until 2013, then you have to wait until 2015.

Only way to get around this is if you sell your house in a normal sale. But a deed in lieu or a direct foreclosure will screw with that eligibility date post bankruptcy discharge.

[gdale6]

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@0REDSOX7 wrote:
Please note that many lenders consider the date of deed transfer as when to start the clock for new mortgage eligibility.

So, say you were discharged in 2012. An FHA loan would make you eligible in 2014. If the deed to your current house wasn't transferred out of your name until 2013, then you have to wait until 2015.

Only way to get around this is if you sell your house in a normal sale. But a deed in lieu or a direct foreclosure will screw with that eligibility date post bankruptcy discharge.

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When dealing with this matter in a BK you cannot be hit with a FC or any other negative event that gets reported to a CRA, the debt has already been extinguished via the BK Discharge. The eligibility date starts ticking on the discharge date.

[ezdriver]

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@gdale6 wrote:

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@0REDSOX7 wrote:
Please note that many lenders consider the date of deed transfer as when to start the clock for new mortgage eligibility.

So, say you were discharged in 2012. An FHA loan would make you eligible in 2014. If the deed to your current house wasn't transferred out of your name until 2013, then you have to wait until 2015.

Only way to get around this is if you sell your house in a normal sale. But a deed in lieu or a direct foreclosure will screw with that eligibility date post bankruptcy discharge.

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When dealing with this matter in a BK you cannot be hit with a FC or any other negative event that gets reported to a CRA, the debt has already been extinguished via the BK Discharge. The eligibility date starts ticking on the discharge date.

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A new mortgage lender will use the later of discharge date or foreclosure date for lending guideline compliance purposes. In my case, the discharge occured after the foreclosure and I'm buying a new house right now so I have experience with this. Because the public record will show the foreclosure even if the credit report doesn't, the lender will find it and use it in underwriting. I think that's what 0REDSOX7 was saying.

[0REDSOX7]

EZ - Thank you! 

That is exactly what I was trying to say.  The lender takes the later date (Foreclosure/Deed In Lieu of or discharge date).

Sorry if that wasn't clear.