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Feeling discouraged, banks and CUs won't listen

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Feeling discouraged, banks and CUs won't listen

We just went through a living hell with our former house. There was hidden rot and mold inside the walls due to construction errors. The whole house needed to be gutted and rebuilt from the ground up. On the advice of numerous contractors, engineers, mold remediators, etc. we initially believed the situation was isolated. Thus, we spent much of our money and took out a loan to repair a few areas. When the problems still weren't fixed, we got more opinions and discovered the whole house was screwed. We also discovered that ours was not the only house that this builder ruined; there was another owner a few towns away whose house also had rotted through. He spent 6 years fighting with the builder and finally was able to get them to rebuild his entire house. We were not so lucky. After talking to several lawyers, we learned that because the house was built 10 years ago we had no legal rights to go after the builder (or the inspector, or previous owners). We could not afford a deficiency judgement, or the taxes that would come with the lender's "forgiveness" and we had to get out of there ASAP as it was unsafe. We filed for Chapter 7 and we were discharged 2/22/16. Prior to filing we had never had late payments on anything, and our credit was 800+. Now it is under 600, we cannot get a car loan at a bank or credit union, and they mostly shut down once they see/hear "bankruptcy". We didn't spend ourselves into bankruptcy, and we did everything possible to avoid it! Even worked with the governor's office! Our story was in the newspaper, too! I am wondering if there is any way to petition to have length BK appears on our credit report reduced, due to the circumstances? Or some other way to get people to realize that we are not a lending risk? I have put together this letter (along with letters from our representatives, engineer's report, etc.), and would appreciate feedback on it, or any other ideas you may have. Thank you!

 

This note is to explain the reason for bankruptcy appearing on our credit history. Prior to October 2015, we had between 790 - 850, no late payments, delinquencies, or collections. We had bought and sold our house in -----, bought and paid off several cars, and had no budgetary problems.
    In July of 2015, we discovered active mold and rot inside of the walls our house and on the structural framing of the house. The house was 10 years old, and we had been living there (as second owners) for 2.5 years. We discovered the problem when we cut a section of drywall to access what we thought was a leaky pipe.
    We were initially told by several mold remediation companies and contractors that the mold and water damage were due to ice dams. Based on this, we took out an ----- loan to complete repairs and properly vent and insulate the attic, walls, and basement. The loan was for $15,000 and we spent several thousand out-of-pocket, as well. ------'s health was so compromised by this time that she had to move in with relatives for the remainder of 2015.
    The improvements did not solve the problem. There was still an overpowering mold odor in the house. After further investigation by an industrial hygienist from Air Quality Management in -------, we discovered that there was more mold and rot in all four walls that they inspected. A controlled drywall removal performed by the remediation company revealed that the plywood surfaces in the wall cavities were covered in black and yellow mold and rot.
    Further investigation by numerous contractors, energy auditors, and forensic engineer ----- uncovered serious construction errors. These errors lead to outside water infiltration and air intrusion, which, in turn, created the perfect environment for mold growth and rot. We later learned of another home owner in ----- who had to deal with the same problems in his house built by the same company.
    The roof, the decks, and the garage were also improperly connected to the house and caused significant mold and rot in the house walls. All parts of the house needed to be gutted down to the studs, including the roof, the porch, the deck, the floors, and all of the walls. The grading and site work were also incorrect, so extensive excavation was also necessary to avoid additional rot and mold. It would have cost as much, if not more, to remediate and repair the house as it would have cost to build a new house.
    We explored every possible avenue looking for legal and/or financial assistance to be able to complete the repairs. Our only legal option would have been to sue the former owners, but we could not find any evidence that they knew of the the problems. Our other options were barred due to statute of limitations, limitation of liability clauses, insurance exclusions, and more. In addition to working with the --local newspaper, the following is a partial list of how and where we tried to find assistance:
        
        1. Governor LePage’s office - chief policy advisor, --------
        2. William Burney, Maine HUD Director, ----
        3. Senator Angus King -----
        4. Senator Chris Johnson -------
        5. Attorney General -----
        6. Secretary of State ------
        7. Chellie Pingree’s office --------
        8. Home insurance provider
        9. Local charities and organizations
        10. Housing counselor

    There was not sufficient financial assistance or legal recourse available to us. Our health was so affected that we had to find alternative housing. We weighed our options and decided that bankruptcy was our most logical path to health and recovery. We did everything we could to find a way to repair the house and neutralize the dangers to our health. Sadly, there were no viable options. We were forced into bankruptcy and have had to pay the price for the builder’s construction negligence.
    We filed for bankruptcy due to unsafe and unhealthy living conditions in the house we owned in ---. We were left with no other options if we wanted to protect our health and move on with our life and healing process. We surrendered our house through bankruptcy. The deed transfer will occur through the uncontested foreclosure process. These two events are anomalies in our financial history and do not represent our risk as borrowers. Our past credit history and the effort we put into finding assistance with our house accurately reflect who we are as borrowers.
    I ask that you keep our situation and past payment history in mind when considering our loan application.

Thank you for your time and understanding.

Message 1 of 15
14 REPLIES 14
Valued Contributor

Re: Feeling discouraged, banks and CUs won't listen

The truth is that it's easy to get new credit cards and auto loans at under 10% interest rate within 6 months.   Seriously.  You should follow the 24 months from bankruptcy to 700 FICO thread.  You can probably apply and be approved for two Capital 1 cards -- tonight.  You apply in one session so they only do one set of credit pulls.

 

Then you need to get a share secured installment loan.  Lots of information on this site.

 

To be honest, it doesn't usually make any difference what the reasons were for the BK -- lenders either will take you or not.  The big banks are a waste of time -- Chase, BofA, etc.  Credit unions are the way to go.  You can usually get auto loans and unsecured cards 12 months after discharge from credit unions.

 

By following the steps on this website, you can quickly get your scores up to 620 within 6 months, and up to 680 or so within 12 to 24 months, which is all you need for most creditors.

 

Also, you should cut that letter down to about 1/4 that size and you can use it when you ask for reconsideration if you are denied.  For the most part, it won't matter -- lenders are either BK friendly or not.  But that letter is way too much information.  Most people won't read it.

 

Look at my credit in my signature, just two years post bankruptcy.  It is not that hard, you just need to spend lots of time on this site and learn and apply what you learn.

 

Good luck.

FICO 08: EX-698, EQ-738, TU-721 - [8/2/2019]
FICO 09: EX-748, EQ-785, TU-770 (8/2/2019)
Mortgage: EX-737, EQ-769, TU-761 - [8/2/2019]
NFCU NavChk 15K | NFCU Visa 50K | CapOne Venture Visa 50K | CapOne Savor 30K | Barclay Aviator MC 12.5K | Discover It 32K | Alliant 3% Cash Back Visa 25K | BECU CLOC 10K | BofA AK Air Visa 5K |Amazon Prime 10K.
239.5K Total Revolving. Alliant Car Loan 15K/31K
BK 7 Filed 8/23/2013 - Discharged 11/27/2013.
Message 2 of 15
Valued Contributor

Re: Feeling discouraged, banks and CUs won't listen


@CH-7-Rebuilding wrote:

The truth is that it's easy to get new credit cards and auto loans at under 10% interest rate within 6 months.   Seriously.  You should follow the 24 months from bankruptcy to 700 FICO thread.  You can probably apply and be approved for two Capital 1 cards -- tonight.  You apply in one session so they only do one set of credit pulls.

 

Then you need to get a share secured installment loan.  Lots of information on this site.

 

To be honest, it doesn't usually make any difference what the reasons were for the BK -- lenders either will take you or not.  The big banks are a waste of time -- Chase, BofA, etc.  Credit unions are the way to go.  You can usually get auto loans and unsecured cards 12 months after discharge from credit unions.

 

By following the steps on this website, you can quickly get your scores up to 620 within 6 months, and up to 680 or so within 12 to 24 months, which is all you need for most creditors.

 

Also, you should cut that letter down to about 1/4 that size and you can use it when you ask for reconsideration if you are denied.  For the most part, it won't matter -- lenders are either BK friendly or not.  But that letter is way too much information.  Most people won't read it.

 

Look at my credit in my signature, just two years post bankruptcy.  It is not that hard, you just need to spend lots of time on this site and learn and apply what you learn.

 

Good luck.


+1  Well said and I'm one of many on here that is living proof of life after BK.   

NFCU Visa 25k | Cap1 QS 11K | Cap1 QS 10.5K | Barclay Apple Rwds 9k | Amex AU 20k | Citi AU 10k | Delta Amex 5k | CFNA FS 3200 | VS 1200 | Car Loan 10/14 |
Message 3 of 15
Member

Re: Feeling discouraged, banks and CUs won't listen

We applied for a car loan and were denied. We applied for a secured card and have to wait 2-4 weeks for approval (this is through a local bank who has been very helpful and willing to work with us). We are waiting on the same bank to approve (or deny) the car loan, which is co-signed with my parents. I am afraid of having too many pulls all at once if we were to apply to Capital One right now. Any thoughts?

Message 4 of 15
Member

Re: Feeling discouraged, banks and CUs won't listen

And, that letter was written specifically for the local bank manager, so she can have supporting evidence when speaking to VP of lending. I can easily cut it down to use in other situations.

Message 5 of 15
Valued Contributor

Re: Feeling discouraged, banks and CUs won't listen

Stop.  Do not apply for anything until you find out what your local bank is willing to do.  If they were to approve you, that would be highly unusual.  Normally with a fresh BK, you go to a dealer who shops your loan all over the place and you get something between 12% and 24%.  Then six to 12 months later you refinance it with a credit union for 6%.

 

Do not apply for any credit until you have an answer from this local bank.  Read this site.

 

The worst thing you can do is to panic and do it all wrong.  I know the awful feeling you have right now, but there are 100's of us on here who contribute regularly who will help you make a step by step plan.  But you have to ask questions and take direction.  We all followed somebody else's path and are happy to give back.

 

Now chill out, read, and let us know what your local bank says.  And if they say yes and offer you something under 18%, I would recommend you take it if you have to have a car right this minute.  

 

Also, fill out the information from this Capital One Auto Finance link and see if they will approve you.  You might be shocked to see a yes and not that high of interest.

 

https://lo-web-fe.capitalone.com/PreApproval/landing

 

Report back what the results are.  It is not a hard pull so it won't hurt your credit.

 

 

FICO 08: EX-698, EQ-738, TU-721 - [8/2/2019]
FICO 09: EX-748, EQ-785, TU-770 (8/2/2019)
Mortgage: EX-737, EQ-769, TU-761 - [8/2/2019]
NFCU NavChk 15K | NFCU Visa 50K | CapOne Venture Visa 50K | CapOne Savor 30K | Barclay Aviator MC 12.5K | Discover It 32K | Alliant 3% Cash Back Visa 25K | BECU CLOC 10K | BofA AK Air Visa 5K |Amazon Prime 10K.
239.5K Total Revolving. Alliant Car Loan 15K/31K
BK 7 Filed 8/23/2013 - Discharged 11/27/2013.
Message 6 of 15
Valued Contributor

Re: Feeling discouraged, banks and CUs won't listen

Whoops, try this link.  Again, it is not a hard pull.

 

https://ane.capitalone.com/prequalify?PFFSRCID=S-C1-12345678901-AHP-0001&referrer_id=SC-Visitor-NOTF...

FICO 08: EX-698, EQ-738, TU-721 - [8/2/2019]
FICO 09: EX-748, EQ-785, TU-770 (8/2/2019)
Mortgage: EX-737, EQ-769, TU-761 - [8/2/2019]
NFCU NavChk 15K | NFCU Visa 50K | CapOne Venture Visa 50K | CapOne Savor 30K | Barclay Aviator MC 12.5K | Discover It 32K | Alliant 3% Cash Back Visa 25K | BECU CLOC 10K | BofA AK Air Visa 5K |Amazon Prime 10K.
239.5K Total Revolving. Alliant Car Loan 15K/31K
BK 7 Filed 8/23/2013 - Discharged 11/27/2013.
Message 7 of 15
Member

Re: Feeling discouraged, banks and CUs won't listen

Thank you. It would be unusual for the bank to approve it. However, they know our whole story and have been there to answer questions since shortly after our creditor's meeting. We are working with a builder who is willing to do builder finance, if necessary. I spoke with the bank branch manager about how long it would be before they would be willing to provide a construction loan. She spoke with the VP of lending and said that they would be willing to seriously consider it one year post-discharge. So, they already know about our situation and how unusual it is. We have a credit union who is willing to do the same thing. We asked the car dealer to not go over a certain %, so he only tried one lender (knowing that would be our best chance). I have a myfico account, so can see the credit pulls.

Message 8 of 15
Member

Re: Feeling discouraged, banks and CUs won't listen

Applied for the Cap 1 pre-approval. It took over 24 hours to get it finished with a lot of calls. Their range (according to the person on the phone) is between 12-18%.

Message 9 of 15
Valued Contributor

Re: Feeling discouraged, banks and CUs won't listen


@Bazinga83 wrote:

Applied for the Cap 1 pre-approval. It took over 24 hours to get it finished with a lot of calls. Their range (according to the person on the phone) is between 12-18%.


Good job!  As I understand it you have to buy a car from a dealer in their network and the rate is based on the vehicle and not based on your credit.

 

Now you know you won't be paying 24%, which is what Road Loans would likely charge you.

 

Did you hear back from your bank yet?  Don't you feel a little better?

FICO 08: EX-698, EQ-738, TU-721 - [8/2/2019]
FICO 09: EX-748, EQ-785, TU-770 (8/2/2019)
Mortgage: EX-737, EQ-769, TU-761 - [8/2/2019]
NFCU NavChk 15K | NFCU Visa 50K | CapOne Venture Visa 50K | CapOne Savor 30K | Barclay Aviator MC 12.5K | Discover It 32K | Alliant 3% Cash Back Visa 25K | BECU CLOC 10K | BofA AK Air Visa 5K |Amazon Prime 10K.
239.5K Total Revolving. Alliant Car Loan 15K/31K
BK 7 Filed 8/23/2013 - Discharged 11/27/2013.
Message 10 of 15
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