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Question about Short Sale and discharged 13

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DaUsMsB
Contributor

Question about Short Sale and discharged 13

This is to anyone that can answer it. I have been banging my head and trying to read up on this everywhere here. I  see a ton of different answers, and dates depending on type of loan.

 

Our BK 13 was discharged 3/2014 and fell off our reports 11/2015.  Now that the BK isnt on our records, this company OCWEN bugged us throughout basically.  We were paying until about 1yr into BK. Then we had the mortgages added in per lawyers advice.  Long story short...shortly after IIB we moved and didnt worry about it like the lawyer said.  Ocwen kept trying to contact us, not collecting...just informing it was past due and try to re-negotiate.  We didn't do anything.

 

We got a forgiveness letter, i forget when...but I have it stored.  We've been checking our credit reports and have seen it report differently from time to time, because we keep bugging all 3 CRAs.  We've seen it as we owe, foreclosed and as of late zero balance and/or foreclosed.  I got tired of checking/fighting so with zero balance we were happy with that.  

 

However the last few weeks, we figured we'd try to get a loan since NFCU has been treating us good now.  It took awhile but they came around and we have couple CCs and a personal and a car loan with them.  Always on time and never late.  Always paid extra.  So we tried to get a home loan since our BK fell off and we've been renting this house for almost 5yrs now.  Also never late and paid early.  So we thought we should be in good and get a loan and lower our monthly housing costs.  However...NFCU sent us a denial letter stating lates and recent shortsale in 2015.  The lates was from my Navient loans I never knew about, but caught them up last year as soon as it hit my report and have been current since.  Long story on Navient, I posted here about that last year.  The short sale kind of caught us off guard as we didn't recall ever seeing that on our credit report.  It probably hit me harder than my wife because I've been the one pushing hard to get our ducks in a row and pay all the bills on time.  Our scores vary.  Mine were hit hard becasue of all the Navient loans...i was almost to 700 until then. I'm back to around 650-680 now.  She's around 720-750

 

Is there anything we can do to get that short sale removed or will we just have to wait? If the answer is wait.  What is that waiting time?  Can we contact our lawyer since our BK is no longer on our Credit report?  Seeing those denials hit me hard as we've been doing well since filing.  Never late on anything and paying for mostly everything cash.  We have money in the bank, but not as much now because we put 5k down on a car loan last year, paid 28k cash for a new truck last year, paid 10k cash for an RV last year.  We would rather not put down a ton of cash for a home loan if possible.  We figure if we put 7-15k down if needed the loan should still be much lower than our payment now.

 

Thanks for any help,

~HaO

Message 1 of 10
9 REPLIES 9
krielly
Established Contributor

Re: Question about Short Sale and discharged 13

I know that conventional loans (Fannie Mae anyhow) are possible 2 years post Chapt 13 discharge if your house was IIB. The date used should be the date of discharge, not a later date.....perhaps the way yours is reporting somewhere is causing the confusion?

 

Check out the Mortgage section. There are some stickys on this topic.

 

You might get a better response if you ask the mods to move your post to the Mortgage section. There are some lenders who post there regularly who are very knowledgeable.

 

K

 


You can't have your cake and eat it too. But you can dip your finger in the bowl and lick the icing!
Message 2 of 10
DaUsMsB
Contributor

Re: Question about Short Sale and discharged 13

interesting...I'll see if I can find that discharge date info and no later.  The main reason I posted here because it was bankruptcy related.  So if the magic # is 2 yrs...then I think I should be good.  It just hit 2yrs last month for discharge.

Message 3 of 10
StartingOver10
Moderator Emerita

Re: Question about Short Sale and discharged 13

Just a couple of questions for you:

 

1) How did Ocwen complete a short sale without your participation? This is very weird to me

 

2) You discharged the mortgage debt in bankruptcy, you can show that with the paperwork you have for the Bk. The normal  next step for the lender is to f/c to remove the lien. Do you have the short sale paperwork or the deed transfer date from you to the lender (if foreclosed)? 

Message 4 of 10
DaUsMsB
Contributor

Re: Question about Short Sale and discharged 13

Sorry, i just read this.  that is a very good question.  Like I said, we moved out of the house in July 2011.  Have not had anything to do with it or anything since then.  We've been disputing them for years on our credit reports and they keep changing to foreclose...late owing something...zero balance...IIB...and just everytime changing.  I don't exactly know how a short sale works, but I guarantee you we did not have a part in it.

 

We don't have any paperwork for the shortsale or foreclosure.  We did get that debt forgiveness letter I spoke about.  We did include it in bankruptcy.  I think we did get full discharge papers, so I'll have to look through that.  Apparently we cannot pull info up on NDC anymore.  It is definitely impacting our credit though

 

Message 5 of 10
DaUsMsB
Contributor

Re: Question about Short Sale and discharged 13

So, we do have the paperwork.  LOL...it's been so long like I said, we were trying to move on.  I just found that it was Litton Loans Mortgaging.  Ocwen actually took over after we filed.  So which pages do we need to submit it? Will it even work? the address is the same, but the loan shows Litton as of our file date.  So that may be where the confusion came in.  Does anyone have experience on which sheets I need to dispute with and knowledge of what happens if the loan is sold off after filing?  Ocwen has been a real harrassing kind of place to us over the years...so that's why I thought we filed using them...but apparently not.

Message 6 of 10
jim44
Established Contributor

Re: Question about Short Sale and discharged 13


@DaUsMsB wrote:

So, we do have the paperwork.  LOL...it's been so long like I said, we were trying to move on.  I just found that it was Litton Loans Mortgaging.  Ocwen actually took over after we filed.  So which pages do we need to submit it? Will it even work? the address is the same, but the loan shows Litton as of our file date.  So that may be where the confusion came in.  Does anyone have experience on which sheets I need to dispute with and knowledge of what happens if the loan is sold off after filing?  Ocwen has been a real harrassing kind of place to us over the years...so that's why I thought we filed using them...but apparently not.


Not too familar with foreclosures as the process varies from state to state.  It would seem logical that a mortgage company would have to give some type of notice and or go to court to have the deed transfered.  I did a short sale after I was served with a summons for foreclosure. I had to have authorization from the lender to sell the property and then once I had an offer, I had to have final approval.  There was a closing just as there was when I purchased the condo.

Here is how my story differs.  The 1st mortgage lender agreed to not seek payment on a deficiency judgement. My 2nd mortgage company although they agreed to the short sale, did not agree. So I had to file CH7 as they had their collection dept seek payment just as you mentioned Ocwen did for you. 

You mentioned a forgiveness letter... assuming this was for the amount you owed that was not covered under a sale, again persuming the OC bank sold your home. Did your lender send you a 1099-C ? as you would be required by the IRS to report this forgiveness amount as income.

IMO, I would (if you can) check county (or city) property records to see if your name is removed from your deed.  Not too sure about Ch13, I know that in CH7, if a lawyer includes the deficiency judgement in your case and you're discharged your can't be legally bothered. Of course I'm not a lawyer or a lender and this has been from my personal experience. Please let us know how this turns out for you.  Best of luck in your credit rebuild.

Message 7 of 10
krielly
Established Contributor

Re: Question about Short Sale and discharged 13

quick add: There is no "income" to report from a forgiven mortgage in BK. If you receive a discharge, you are "insolvent", and there is no tax due on the forgiven debt.

 

 


You can't have your cake and eat it too. But you can dip your finger in the bowl and lick the icing!
Message 8 of 10
StartingOver10
Moderator Emerita

Re: Question about Short Sale and discharged 13


@DaUsMsB wrote:

So, we do have the paperwork.  LOL...it's been so long like I said, we were trying to move on.  I just found that it was Litton Loans Mortgaging.  Ocwen actually took over after we filed.  So which pages do we need to submit it? Will it even work? the address is the same, but the loan shows Litton as of our file date.  So that may be where the confusion came in.  Does anyone have experience on which sheets I need to dispute with and knowledge of what happens if the loan is sold off after filing?  Ocwen has been a real harrassing kind of place to us over the years...so that's why I thought we filed using them...but apparently not.


The mortgage(s) that were discharged in your Bk are required to read iib and zero balance.  iib = included in bankruptcy.

 

Whatever happens to the property thereafter (foreclosure or SS) does not change how the TL is suppose to report on your CR if your Bk was prior to the f/c or the SS. 

 

Note:  If your SS or F/C happened prior to your filing, then the TL should read with that designation rather than iib.

 

So if you filed Bk before your property was "sold" by the bank in a SS (or F/C) then your TL should read iib and zero. You only have to supply a copy of your discharge and potentionally supply a copy of the petition showing the page where the TL was listed.  Nothing else.

 

If the CRA doesn't report it correctly, I would report the CRA to the CFPB.  

 

I am still blown away that they said they did a short sale on your property without you going through all the required documentation.  It is a clear error in reporting. But Ocwen is a very, very sleezy mortgage servicer that breaks all the rules.  In fact, Ocwen has been sued by the government for their mortgage servicing issues. Here are a couple of interesting links:   http://www.consumerfinance.gov/about-us/newsroom/cfpb-state-authorities-order-ocwen-to-provide-2-bil...

 

 

https://nationalocwensettlement.com/

https://www.lawyersandsettlements.com/articles/forced-placed-insurance-lawsuits/lender-insurance-len...

 

Here is one with the deadline to claim against Ocwen might be available to you OP:  http://www.consumer-action.org/lawsuits/by-status/open

Message 9 of 10
jim44
Established Contributor

Re: Question about Short Sale and discharged 13


@krielly wrote:

quick add: There is no "income" to report from a forgiven mortgage in BK. If you receive a discharge, you are "insolvent", and there is no tax due on the forgiven debt.

 

 


Starting Over is correct in the previous post.  My experience differed from the OP in that my short sale closed before I filed.  However for that years Income Tax filing I did received a 1099C for the "forgiven difference".  The reason I mentioned this is that the OP stated they had received a 'forgiveness" letter from the original lender.

Message 10 of 10
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