08-25-2012 06:46 AM
Hi I was wondering my husband and I are post bankruptcy almost one year with a chapter 7, credit rating is about 675 post bankrupt so my question is this We never did a reaffirmation on our mortgage but are continuing so far to live here and make our payments, we had a realitor out last week and she told us we cannot sell the home for what we need to get out from under it and the monthly mortgage payments are just getting to much for us for reasons out of our control so can we legally apply and close on another mortgage and then after closing on a new mortgage let this current home fall into foreclosure or can we let it foreclose before applying for a new mortgage and it not further effect our credit scores as it was discharged a year ago and currently shows a zero balance on our reports. I just dont know what Bank of america can do to our credit now that we are post bankrupt one year. Can they hurt our credit any further than the bankruptcy already has done. Also what should we consider to be the best option, forclosure, short sale or deed in lieu ? Please help
I am a Realtor that deals with this every day.
Since you have been successfully discharged from your Ch 7 BK you are no longer personally liable for the repayment of your mortgage since you didn't reaffirm.
If you decide to stop making payments, the bank has the right to foreclose in order to get the property back. The BK only gets rid of your personal liability, the bank still has a mortgage lien on your property. The only way to get "rid" of the mortgage lien is to either sell the property, foreclose or Deed in Lieu. Since your home's current market value is less than the outstanding loan, a short sale is possible.
The tradeline on your report will continue to remain exactly as it shows right now even if you stop making payments.
However, in the public records a f/c action against you and the property will show.
In order to get a new loan, you have to show the new lender what happened to the current home you have - sold, DIL or f/c.
Most of the lenders won't issue you a new loan until a min of 3 yrs (FHA) from the date of transfer of your current deed to the new buyer or transfer back to the bank.
The quickest way for this to occur is a short sale. My short sales average 60 to 120 days from contract to closing. So, if you are looking to do something fast so you can qualify for a new loan more quickly, a short sale is your best bet. BOA won't even offer the DIL until you are in the short sale process anyway.