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NON-FHA Mortgage Discharged in 2010 Ch 7; 2015 & STILL NO Deed Tfer - Is FHA even a possibility?

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Anonymous
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NON-FHA Mortgage Discharged in 2010 Ch 7; 2015 & STILL NO Deed Tfer - Is FHA even a possibility?

My husband & I filed a joint chapter 7 bankruptcy in 2009, that was discharged in April 2010.  In it we did not reaffirm and essentially started over - except for student loans which never go away Smiley LOL  After discharge, we moved to a rental in a different county and Chase (lienholder) had the locks changed and sent us a letter advising that they'd intended to foreclose.  I called and offered to just do a deed-in-lieu to save them the costs and could never get them to agree.

Fast fowarded five years and they still haven't foreclosed/transferred the deed/whatever... There's been no  mortgage on it since 2010, yet its sitting empty and deeded to me Smiley Surprised  We're now trying to purchase a home again and have seem to hit a brick wall because we cannot force Chase to do the transfer and HUD does not offer clear guidance on properties included in bankruptcy.  We'd gotten preapproval in February and wrote a contract with an end date of March 24 - we're on our second and final contract extension and after getting to the final stages of underwriting, just days before settlement the loan has been suspended because of this house issue.

 

I've done extensive research and I don't understand even a little how I'm supposed to wait 3 years from a date of transfer when I can't make the lender do the transfer... I thought maybe it was just our lender but today we spoke with a new home consultant because its becoming clear that we're not closing next week and when I explained the bankruptcy/discharge/no foreclosure thing, she practically swore on 10 bibles sitting on her pregnant belly that it isn't possible!  

 

Specs follow immediately - does anyone have solid advice or any other type of help?  Solid meaning we do not have this exact same problem all over again a month from now after we find another home.

 

Husband's "mortgage" scores - EQ FICO5 - 609; TU FICO4 - 664; EX FICO2 - 652... His FICO8 are 614, 663, & 653 respectively

My "mortgage" scores - EQ FICO5 - 606; TU FICO4 - 595; EX FICO2 - 587... My FICO8 are 606, 632, & 636 respectively

Our ratios are solid, flawless rental verification, cash in bank for dp AND 4-5 months of reserves

Installment lines perfect since bk; some lates on small revolving during a time that we were thrown into funding the household of my disabled mother who'd lost her WC pay and my own health problems (LOX was accepted by current UW)... Larger revolving no lates; student loans in forbearance but no lates... Not one break in employment since my transition from Navy to civilian in 2002... and good income.

 

Who do I need to know/date/blackmail/whatever... to get our loan through?  It seems insane that we can be forced to wait until some indefinite time because we filed bk five years ago!?!?

 

 

Message 1 of 13
12 REPLIES 12
Anonymous
Not applicable

Re: NON-FHA Mortgage Discharged in 2010 Ch 7; 2015 & STILL NO Deed Tfer - Is FHA even a possibil

The house has been sitting empty for 5 years?  So basically you want your name off the deed, and they won't play ball?

Message 2 of 13
DaveInAZ
Senior Contributor

Re: NON-FHA Mortgage Discharged in 2010 Ch 7; 2015 & STILL NO Deed Tfer - Is FHA even a possibil

I can imagine your frustration, you "played by the rules", getting preapproval and then blocked at the last minute by your lender's internal rules. And I don't see how your new "home consultant" can swear it isn't possbile - FHA lender guidlnes clearly state the standard waiting period for a FHA insured mortgage is 2 years post discharge of a BK7 or 3 years after foreclosure. You are NOT in foreclosure, foreclosure begins when the lender initiates the legal process required in your state, which they have not done.

 

I'm not sure what a "home consultant" is, I would talk to a mortgage broker in your area that works with multiple lenders, explain your situation and ask them if they think one/some of their lenders will approve a mortgage for you based on the FHA lender guidlines, which in my opinion you meet.

Message 3 of 13
DallasLoanGuy
Super Contributor

Re: NON-FHA Mortgage Discharged in 2010 Ch 7; 2015 & STILL NO Deed Tfer - Is FHA even a possibil


@DaveInAZ wrote:

 You are NOT in foreclosure, foreclosure begins when the lender initiates the legal process required in your state, which they have not done.

 

 


not in foreclosure, but every lender i know will treat you as if you are since you are 120 days late

 

120 late = foreclosure

 

Retired Lender
Message 4 of 13
DaveInAZ
Senior Contributor

Re: NON-FHA Mortgage Discharged in 2010 Ch 7; 2015 & STILL NO Deed Tfer - Is FHA even a possibil


@DallasLoanGuy wrote:

not in foreclosure, but every lender i know will treat you as if you are since you are 120 days late

 

120 late = foreclosure

 


You certainly know how lenders think, BUT - the mortgage was discharged in Ch7 BK, how can you be "late" on a debt that no longer exists? The lender is prohibited by law from reporting it as late after discharge, again because there is no debt. On the other end of things, I've been paying my "mortgage" on time for more then 4 years after it was not reaffirmed and was discharged in my BK7 - my lender is also prohibited by law from reporting my payments as being "on time", because again there is no debt. All my timely payments do is prevent the lender from enforcing the foreclosure clause in my Deed of Trust.

 

EDIT: This question may be more suitable for an attorney, but as far as how lenders consider situations like this, how about if the OP simply filed a Quit Claim, removing themselves from the title? There must be some way around lenders holding people in limbo when they fail to fulfill their responsiblity for years & years and fail to foreclose accordingly.

Message 5 of 13
Anonymous
Not applicable

Re: NON-FHA Mortgage Discharged in 2010 Ch 7; 2015 & STILL NO Deed Tfer - Is FHA even a possibil

Thanks Dave! You are exactly right about the situation - I'm not late because there's no mortgage to be late on.  The mortgage was discharged 5 years ago and I've been renting since. 

 

I've spent so much time searching and haven't found anything yet but I agree that there must be some way because this is just insane.  

Message 6 of 13
Anonymous
Not applicable

Re: NON-FHA Mortgage Discharged in 2010 Ch 7; 2015 & STILL NO Deed Tfer - Is FHA even a possibil


@DaveInAZ wrote:

I can imagine your frustration, you "played by the rules", getting preapproval and then blocked at the last minute by your lender's internal rules.

Exactly! We've gone the distance and supplied all docs... paid for the appraisal, inspection, earnest money, etc... and NOW I'm being told that my loan is denied because of something that I have no ability to "fix".  I got the loan through a broker and the broker states that the lender denied the loan because of FHA rules, not an internal policy.  I've searched and there are NO FHA rules for this situation so I'm just lost.

 

And I don't see how your new "home consultant" can swear it isn't possbile - FHA lender guidlnes clearly state the standard waiting period for a FHA insured mortgage is 2 years post discharge of a BK7 or 3 years after foreclosure. You are NOT in foreclosure, foreclosure begins when the lender initiates the legal process required in your state, which they have not done.

 

Smiley LOL  I realize that I should've been clearer... she's not "my" consultant... she's the rep that shows the houses and gives you the info at the Lennar model... I debated the issue with her for at least a half hour before we agreed to disagree... Exactly what you just said is what I said - to her, to the broker that I was working with, to the lender, and to anyone else that I could think of.  There's no foreclosure, so how can I be denied based on the foreclosure guidelines?  I've met the bankruptcy time, so I'm super frustrated.

 

I'm not sure what a "home consultant" is, I would talk to a mortgage broker in your area that works with multiple lenders, explain your situation and ask them if they think one/some of their lenders will approve a mortgage for you based on the FHA lender guidlines, which in my opinion you meet.

 

If you know anyone, please let me know.  From everything that I can find, I believe that I meet the guidelines too... I've been siick the last few days and haven't had my normal "fight" in me... hopefully, when I kick whatever this "sick" is, I can find someone who can help.  Great minds think alike :-) I've emailed the attorney that did my bankruptcy to ask about doing a quit claim and am just waiting to hear back.  I'll update if/when I know more.  

Message 7 of 13
Anonymous
Not applicable

Re: NON-FHA Mortgage Discharged in 2010 Ch 7; 2015 & STILL NO Deed Tfer - Is FHA even a possibil


@Anonymous wrote:

The house has been sitting empty for 5 years?  So basically you want your name off the deed, and they won't play ball?


Yes, empty with no mortgage and their locks.  I've rented the entire time and I've recently learned that my "waiting period" to purchase hasn't even started because of the deed issue and I have no way to force the transfer.  As mentioned, there aren't any real guidelines on this but its become a wall nonetheless.  

Message 8 of 13
Anonymous
Not applicable

Re: NON-FHA Mortgage Discharged in 2010 Ch 7; 2015 & STILL NO Deed Tfer - Is FHA even a possibil


@DallasLoanGuy wrote:

@DaveInAZ wrote:

 You are NOT in foreclosure, foreclosure begins when the lender initiates the legal process required in your state, which they have not done.

 

 


not in foreclosure, but every lender i know will treat you as if you are since you are 120 days late

 

120 late = foreclosure

 


I'm confused as to how I'm 120+ days late on a loan that was discharged in bankruptcy Smiley Frustrated My credit report reflects a zero balance and states "discharged in ch 7 bankruptcy"... I haven't had payments reported either way since I filed bankruptcy in October 2009.  I was actually not late when I filed and didn't go "late" until they held and refused payments because of the bankruptcy.  I'd planned to keep my house and was forced into bankruptcty by an unrelated family law issue; I only accepted that I couldn't after all of the downfall from their refusing my payments.  I didn't just go late and run or anything - they held my checks and gave them to my attorney at the Stay hearing - that's when the loan went late and things went downhill.

Message 9 of 13
DallasLoanGuy
Super Contributor

Re: NON-FHA Mortgage Discharged in 2010 Ch 7; 2015 & STILL NO Deed Tfer - Is FHA even a possibil


@DaveInAZ wrote:

@DallasLoanGuy wrote:

not in foreclosure, but every lender i know will treat you as if you are since you are 120 days late

 

120 late = foreclosure

 


You certainly know how lenders think, BUT - the mortgage was discharged in Ch7 BK, how can you be "late" on a debt that no longer exists? The lender is prohibited by law from reporting it as late after discharge, again because there is no debt. On the other end of things, I've been paying my "mortgage" on time for more then 4 years after it was not reaffirmed and was discharged in my BK7 - my lender is also prohibited by law from reporting my payments as being "on time", because again there is no debt. All my timely payments do is prevent the lender from enforcing the foreclosure clause in my Deed of Trust.

 

EDIT: This question may be more suitable for an attorney, but as far as how lenders consider situations like this, how about if the OP simply filed a Quit Claim, removing themselves from the title? There must be some way around lenders holding people in limbo when they fail to fulfill their responsiblity for years & years and fail to foreclose accordingly.


i agree, lenders are holding people in limbo

considering how many people walked away out of convenience and not hardship, i can hardly blame them for letting a file fall thru the cracks.

 

if i were the op i would rent the thing out below market with no manitenance implied..... collect the rents until they foreclose.

 

this is a subject to write your congressperson about for sure.

 

Retired Lender
Message 10 of 13
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