topic Re: Foreclosure in Mortgage Loans

Foreclosure

Anonymous — Tue, 26 May 2009 13:38:32 GMT

My son't home was just foreclosed. My name is on it as I had to sign for him to get the mortgage. Is there any way I can get my own credit score back? (It WAS 758--NOW 508)

Re: Foreclosure

Anonymous — Tue, 26 May 2009 13:43:13 GMT

Unfortunately, that's the risk you take in co-signing. They can also come after you for any deficit after the house is sold.

Re: Foreclosure

Anonymous — Tue, 26 May 2009 13:49:26 GMT

Ohmygosh that would be a real nightmare! Can't believe I'm in so much trouble after having such a great credit score over the years. Seems I should have some options. but I guess not. Lesson learned--too late!

Re: Foreclosure

DallasLoanGuy — Tue, 26 May 2009 13:49:33 GMT

@Anonymous wrote:
Unfortunately, that's the risk you take in co-signing. They can also come after you for any deficit after the house is sold.

while they can.... i am seeing most not go for the deficiency balance.

Re: Foreclosure

Anonymous — Tue, 26 May 2009 13:56:23 GMT

After the house goes to foreclosure--how long does it affect my credit?

Re: Foreclosure

DallasLoanGuy — Tue, 26 May 2009 14:00:48 GMT

it will fall off in 7yrs.

it hurts less every day until then.

Re: Foreclosure

Anonymous — Tue, 26 May 2009 14:20:25 GMT

Thanks for the info---I'll start counting down now!

Re: Foreclosure

Anonymous — Tue, 26 May 2009 14:37:17 GMT

keep any and all documentation you have/can get to show that you co-signed. While its gonna affect you as if you purchased the home yourself credit wise, it might help in the future if you ever decide to buy yourself.

Re: Foreclosure

Anonymous — Tue, 26 May 2009 14:52:31 GMT

I do have a mortgage and have never been late with my own. Plus, all MY credit cards have been paid on time, never late. It's just my son's mess that has me worried. For now, there is no looking forward to retirement. Must keep working till this mess is straightened out. But, I WOULD like to re-establish my own credit.

Re: Foreclosure

Lel — Tue, 26 May 2009 19:14:45 GMT

@Anonymous wrote:
I do have a mortgage and have never been late with my own. Plus, all MY credit cards have been paid on time, never late. It's just my son's mess that has me worried. For now, there is no looking forward to retirement. Must keep working till this mess is straightened out. But, I WOULD like to re-establish my own credit.

Speaking of credit cards, be really, really, really fastidious about checking your credit limits on your cards. One unfortunate fallout of foreclosure is that when the CCCs do their routine credit checks and see the foreclosure, they will sometimes cut your credit limit down to the amount owed. If you use your credit card without realizing this change, you could be hit with massive overlimit fees. Some CCCs cancel credit cards outright.

Don't cancel any credit cards you currently have, and keep up your practice of always paying on time. It's unlikely that you're going to be able to get a new credit card anytime soon. Hopefully you don't have any immediate need to refinance your own mortgage, because it is going to be impossible to get a new loan for a long time (anywhere from 3-7 years, I believe).

Sorry about your unfortunate situation. Just work hard to preserve what you have.

Re: Foreclosure

Anonymous — Tue, 26 May 2009 19:28:31 GMT

Actually, that did happen to one of my credit cards. I don't use them any more so hopefully I won't get hit with any big surprises. I do appreciate all the information. Wish I had been wiser, sooner.

Re: Foreclosure

Lel — Tue, 26 May 2009 20:16:49 GMT

@Anonymous wrote:
Actually, that did happen to one of my credit cards. I don't use them any more so hopefully I won't get hit with any big surprises. I do appreciate all the information. Wish I had been wiser, sooner.

Whatever credit cards you have, keep them active. The CCCs are looking for reasons to cut CLs or cancel cards. Prolonged inactivity can lead to both. So long as you pay your statement balance in full, you won't incur any finance charges.

[No, I'm not going to get into a discussion about PIFing prior to the statement closing date; that's more important for those who need to grab a few more points in a short period of time; the OP needs to focus on long-term credit rehabilitation.]

You want to keep your CCs as intact as possible, since it's important to have a sufficient amount of available credit to make sure utilization does not get too high (if and when you start using your cards more frequently). Also, having cards for long periods of time increases your average age of accounts, which is a positive factor in FICO scoring.

Re: Foreclosure

Anonymous — Tue, 26 May 2009 20:56:53 GMT

It is so good to finally get some GOOD news about my credit cards! Yes, I have had the two active ones for years. The limits are high as I've had to use them for my children's financial issues. Now that they are all earning their own $$ I am concentrating on paying off both cards. It will take a while but my payments are consistent. I won't cancel them as they are good for emergencies. Fortunately, I do not need to apply for credit for any purpose.