topic Re: foreclosure in Rebuilding Your Credit

foreclosure

Anonymous — Wed, 01 Oct 2008 20:06:02 GMT

I have a friend who was divorced last year. Her ex was awarded the house in the agreement. Now he has let it go to foreclosure. This has affected her credit score. What can she do?

Re: foreclosure

Anonymous — Wed, 01 Oct 2008 21:17:23 GMT

Unless the lender feels like not reporting this information out of the goodness of their hearts there isn't anything your friend can do. When the bank made their lending decision to loan them the money to purchase the house it was based on both of them making payments on the loan. The divorce decree states how things are supposed to be split after the divorce, but if they didn't go through the step of getting the house refinanced to get your friend's name off the note they are up that famous creek. Bottom line the divorce decree has no effect on the legally binding note that was signed prior to its existence.

Re: foreclosure

Lel — Wed, 01 Oct 2008 22:14:03 GMT

@Anonymous wrote:
I have a friend who was divorced last year. Her ex was awarded the house in the agreement. Now he has let it go to foreclosure. This has affected her credit score. What can she do?

This is sadly a recurring theme on these forums. An entire board could be dedicated to the pitfalls of divorce.

The divorce agreement probably said that the ex-husband would get the house but would be required to refinance within a specified period of time, such as six months. Unfortunately for many people, this often doesn't happen, and the ex who no longer lives in the house gets slammed if the occupant defaults on the mortgage. I don't think there's any way to fix this problem; if she is on the note (and possibly still on the deed) then it's going to count against her. After all, so long as she is still on the mortgage, she is still equally responsible for the payments.

Re: foreclosure

Anonymous — Wed, 01 Oct 2008 22:45:20 GMT

The bottom line in 90% or more of cases: creditors don't care if you get a divorce, or what is in your divorce decree. If your name is on the agreement, you're on the hook for it, credit-wise. In some cases you can sue the irresponsible ex for damages, but that won't help your credit report or score.

Re: foreclosure

athensguy — Mon, 06 Oct 2008 02:21:53 GMT

The ex. can be sued. My DW had a similar problem and we were still able to take out a mortgage the next year when we could show that it wasn't really her fault with the Divorce Decree and where we sued the ex as documentation.

Re: foreclosure

Anonymous — Mon, 06 Oct 2008 06:27:43 GMT

athensguy

how long since you were able to get the loan. I highly doubt in this credit situation they will overlook a foreclosure that is this recent.

Original poster

Has the house already been seized/foreclosed. Could you step in and make the payments and take control of the house from the ex (make sure you re-fi in your name and they release the ex releases any claim)

Re: foreclosure

athensguy — Mon, 06 Oct 2008 14:22:12 GMT

The foreclosure was finalized around June '07 and we bought a house this year in March. We had documentation to prove that we attempted to rehab the loan and the divorce decree that stated the ex was required to refinance or sell the house and he did not do so during his allotted time frame.

Re: foreclosure

Lel — Mon, 06 Oct 2008 17:09:51 GMT

@athensguy wrote:
The foreclosure was finalized around June '07 and we bought a house this year in March. We had documentation to prove that we attempted to rehab the loan and the divorce decree that stated the ex was required to refinance or sell the house and he did not do so during his allotted time frame.

That's great to hear that you were able to escape from the consequences of the negligent ex-husband. It also highlights the supreme importance of having documentation of everything that you do. Good job.

Re: foreclosure

recoverychick — Mon, 06 Oct 2008 17:39:22 GMT

This happened to me, but not to the extent of foreclosure. I caught it by the second month and began paying the mortgages for the next 16 months until the divorce was final. Because it, was early, the bank removed the lates for GW (back in 2001).

It took him to court for contempt and I was awarded all my back payments. That was the good news. The bad news is that credit is separate and I was equally liable.

Good luck to your friend and God Bless.

Re: foreclosure

athensguy — Mon, 06 Oct 2008 23:05:56 GMT

We caught it at 60 days reporting late on her CR. However, the bank would not let us catch up the loan. They told us the only way we could bring the loan current was to pay it off (refi), which of course we couldn't do due to the fresh now 90 day late...

Wells Fargo of course. I assume that most banks would have allowed us to pay the fees and late payments to catch it up. Am I wrong?

And now they might be taking over my Wachovia account. Guess I'll have to close that one.

Message Edited by athensguy on 10-06-2008 07:05 PM