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Foreclosure
The process by which the holder of a mortgage sells a property after the debtor defaults on their loan for it
2,433 Questions
What happens if your house goes into foreclosure for a second time?
If homeowners fall behind once, but are able to stop the foreclosure process before losing their home, and then fall behind again, the bank will start to foreclose on the house all over again. However, it will not be able to begin at the point it left off the last time -- the entire process must start from the beginning.
Unfortunately, a significant number of people who are successful at avoiding foreclosure once end up in the same situation again. Either due to unrepairable financial conditions or an unwillingness to change personal spending habits, they may find that they have not prepared for an emergency or changing life conditions.
Homeowners who fall behind on their mortgage more than once for a significant period of time and actually end up in foreclosure may wish to consider selling their home or giving it back to the bank and moving on. Desperately keeping hold of an unaffordable property is almost always a mistake, and falling into foreclosure more than once is a pretty good indication that it may be time to give up on a losing battle.
From the mortgage company's perspective, though, homeowners who fall behind on the loan will be treated almost exactly as any other borrowers who do the same. After a few months of pre-foreclosure collection attempts, the legal process will begin in the county court system and the lender will attempt to have the property auctioned off to satisfy the default.
The only significant difference between a second foreclosure and a first one may be the lender's unwillingness to negotiate with the borrowers for a loan modification or other solution to the problem. In fact, if the owners are behind on payments for a forbearance or modification, the bank refuse to work with them at all for another workout program.
This is because most banks, once homeowners who have been given a second chance have fallen behind again, consider themselves as having done all they reasonably could to help stop foreclosure. Of course, this position is somewhat understandable by lenders, but it does not assist homeowners in finding another solution besides selling or qualifying for a foreclosure refinance loan.
But unless the owners have already worked with the bank for a plan and have fallen behind, a second foreclosure will not differ in any significant regard from a first time. Homeowners should always seek out as many different options as possible, and try to save their properties quickly, but simply falling into foreclosure again after successfully stopping it once will not dramatically affect the process or cause lenders to act even more aggressively than they already do.
Often confused with a "short sell", a "deed in lieu" is used when a homeowner facing foreclosure asks the lender to accept the deed instead (in lieu) of foreclosure. A sample request for a deed in lieu can be found at the source below.
Does foreclosure affect the credit lines used for car loans and credit cards?
Foreclosure makes your credit score go down. If you already have a car loan, this shouldn't change anything. I've never heard of them changing the interest rate. Credit card companies however can do almost anything they want. If your credit score goes down significantly, they can raise your credit card interest rate. Even if you've always paid on time and never had any problems with them.
What happens if your repossessed house is sold for less than what is owed?
You owe the difference I think.
In virtually all lender agreements there is a stipulation that any improvements made are to remain with the property. This generally pertains to things such as an air conditioner or furnance that has been replaced, in some cases ceiling fans, those things which would damage or devaluate the property if they were to be removed. The safest option would be to simply ask about specific items, rather than remove them and take the chance of it creating problems at some later time. Unless you have a specific agreement with the owner of the mortgage anything that has been installed has become a fixture and is PART OF the property once you install it and no longer your personal property. So if you upgraded the dishwasher, for example, you must leave it unless you specifically get permission to replace it with the old one that you removed. Same with your grandma's heirloom light fixture that you brought to the house. Once you installed it, it became part of of the house and must remain with the house legally unless you get a signed agreement that states that you can replace it with a different light fixture.
What is the purpose of a home seller's concession?
Seller-paid concessions, when used properly, can mean the difference between closing a home sale and losing one. A concession is anything of value added to the transaction by the seller, builder, developer, salesperson or any interested party. A concession may also include any closing costs that would normally be paid by the buyer or cash given to the buyer to lower non-housing debts. Funds received from a relative to assist with a home purchase, or cash contributed from an employer as part of a corporate transfer are not considered seller concessions.
Just the loan holder (You) will be affected by this on credit reports. You two were wise to protect his credit so he comes out A-1 even though your credit is destroyed. Now you can use his excellent credit to secure a new home.
Is there a simplified estate procedure?
Estate procedures will vary from state to state. Some states have simplified procedures depending on the value and nature of the assets involved. In most cases, most people are better off with a living trust to avoide probate all together. However, you should consult with a probate/estate planning attorney familar with the laws of your state.
Where can you find samples of financial hardship letters?
Samples won't do you much good when you don't know the psychology behind writing these letters. In fact, many people shoot themselves in the foot by following online samples.
Your best bet is to learn what the lenders are looking for and to familiarize yourself with the new government programs, and show a) why you qualify for the program you're requesting approval for, and b) why you will be able to make the resulting payments.
Answer
Although there are such letters offered for a small fee by businesses that supply legal forms, these letters have little if any affect when presented to a creditor.
Hardship letters are generally reserved for student loans. Such a letter must be accompanied by substantiating documentation of a permanent physical or mental condition that renders the debtor from ever having the ability of repayment. However, even under cited circumstances it has become extremely difficult to be granted a hardship dismissal of federal student loans.
Be that as it may an example would be similar to:
Dear Sir or Madam,
This correspondence is a request for the amending of (name of debtor(s)) account# xxxxxxx, on grounds of hardship.
I/We, wish to request a reduction of the amount of repayment to $xxxxx (per week/month).
This change is requested from day/month/year to day/month/yr.
(Include details of the reason for the request and disposable monthly income vs. expenditures.)
I/We, ask that you consider this request as a matter of urgency.
Thank you for your assistance in this matter.
Respectfully,
(Signature(s))
The debtor should change the wording to fit individual circumstances. Such correspondence can do no harm, but neither is it likely to be of much help.
How do you buy a foreclosure house and do you need an agent?
You virtually never "need an agent" for any real estate transaction. Because of the strained situations in foreclosures it's likely that they aren't involved.
Most mortgage companies will provide you a list of properties they already have foreclosed on, if you contact them for their Real Estate Owned list (REO). Of course, a bank knows the value of what it has and i wouldn't expect a real great deal from them.
Most areas require foreclosure by public auction and that auction must be advertised in the business papers. You can go and bid, but of course, you will be bidding against the lender, and have to have funds ready to close the deal.
Buying forclosures (or about to be foreclosed) is an art and does not mean you would get a deal. First, if there is actually more value in the property than the mortgage that's being foreclosed, the person should be selling it just like any other property. If s/he won't (because of personal sometimes foolish reasons), that's where the art of having him sell it to you comes in. If the mortgage is more than the value...well that's no deal to buy as the seller needs to pay off the mortgage to give you title. And remember, frequently, the owner stopped caring/maintaining the property well before he stopped paying the mortgage. And remember too it can be risky and more expensive for you than the lender, as the seller may well have other debts that have attached to the property and will have to be cleared. (The lender in whats caled first position, doesn't have to worry about these other lesser priority leins, but you do).
Can a 1099C be issued for an amount that was forgiven?
What if you can't afford to pay via a chapter 13 and have already filed a chapter 7 in 2001?
There isn't much of a choice to make, if the "13" is dismissed the debtor's creditors can proceed with whatever collection action is allowed according to state laws. This generally means the repossession of secured property, foreclosure and perhaps lawsuit(s). The most the debtor can hope for is to make affordable agreements with individual creditor(s) for debt repayment. That not being possible, the debtor should become informed of their legal rights if sued, and the process needed to protect their personal and real property as established by the laws of the state of residency.
Be very careful with a Deed-in-Lieu....We had a VA mortgage and were only behind 15 days, but they continued to add late fees and extra costs so that it was impossible to catch up. We contacted a VA representative who told us it was better to do a Deed-in-Lieu...so we did. I sent all the information to the appropriate office 3 different times, twice with return receipt so I knew they had received it. As we thought everything was being taken care of...we were told by a friend that we were listed in the newspaper as a foreclosure. When we contacted VA and the mortgage company they said..too bad..they had already started the procedure. I told them that was not legal as we had filed a Deed-in-Lieu and all was recorded. They said they didn't care and foreclosed on us anyway. It destroyed our credit and not for only 7 years as they always state. It showed up 10yrs later and we still were turned down for credit because of it.....Good Luck but ask ALOT of questions before signing anything.
How long do foreclosures stay on your credit report?
The Fair Credit Reporting Act allows the legal action of foreclosure to remain for 7 years from the date of filing.
First, buy the house in your name not your husbands. Do not have his name anywhere on the title and be sure he signs the waiver that says he has nothing to do with the deed or property. So, use only your credit. As long as all is in your name with only you responsible for making payments his bad credit will have no impact on your home loan.
If you are 30 days late on a house payment can the bank take your house when filing chapter 7?
Don't hold me to this, but I don't think they can just take it back for being thirty days late. I think they would have to foreclose on your house first. Or get a judgment lien against your house first.
No one can garnish anything unless they sue you first and win a judgment. If the statute of limitations has expired on the debt, then you would have an affirmative defense in court should you be sued. The SOL period depends on state law. A 10 year old debt, however, should NOT be on your credit reports and can not be reinserted.
Does a foreclosure have to be listed on public record in order to be valid?
No, in all likelihood it will eventually show up on the credit report and be entered at the county recorder's office. If it pertains to a credit report, the consumer should keep in mind that the credit information of a consumer will not necessarily be found on all three credit bureaus reports.
How long does a foreclosure remain on your credit report?
I believe it is ten years after the forclosure is finalized. The same holds true for bankruptcy, too. I hope that helps - Mr_Dog
How long before a bank will repossess an automobile?
It depends.Once you are one day late they can repo.But they usually wait 30-45 days depending on your payment history.If they call you talk to them they will work with you.
Depends on a few different variables. A) The original finance contract, what it says is what goes. B) Your state's laws. C) Any court proceedings which may dictate how long you have.
Foreclosure is a legal procedure filed against borrowers who have failed to pay a mortgaged home loan. If the loan itself is reported to the credit bureaus, then prior to the filing of the legal action the "tradeline" (account listing) would be notated "foreclosure" or "foreclosure proceedings begun". This idicates the account is seriously delinquent and filing of legal action is imminient. This "reporting" is done by the lender/Data Furnisher. This entry would remain for 7 years from the month/year the account was last paid on time immediately prior to its' default.
If no remedy is provided (quick sale, deed in lieu of foreclosure or payment in full), then the lender proceeds to file the actual legal action. This does not "get reported". Rather, as with all public records, independent contractors scan public records and re-sells these to various databases, including the three major credit bureaus. By this method, the legal action of foreclosure finds its' way onto your personal credit report. The legal item would be displayed on your credit report for 7 years from the date of filing.
So, it is possible to have two notations, one in the "account history" section and one in the "public records" sections, of the same foreclosure. Both entries would be correct. The public record would remain for slightly longer than the account entry notation.
If the foreclosure is accurate, there is little a consumer can do to have it removed. This information would be considered vital credit data. Foreclosure is huge indicator of credit risk and is the exact reason that credit information is referenced by prospective lenders.
If, on the slim chance, you did manage to have an accurate foreclosure item removed from your credit report; the public record at your local courthouse would still remain. Thus, the record would most likely reappear on your credit report in the future. It can be extremely difficult to obtain a mortgage loan with a foreclosure listed on your credit report. Obviously, this is the biggest indication to lenders that you do not repay home loans. It is also the best reason to avoid foreclosure at all costs. Even a deed in lieu of foreclosure is better than allowing a lender to file against you.
How long do you have to wait after refinancing your home to sell?
Two years or you will have to pay uncle sam capital gains.
How long do you have to wait to refinance after foreclosure?
If the mortgage on your property is foreclosed the bank takes possession and you lose the property. You can't refinance. I have heard that to take on a new loan is possible in as little as two years.
However, if you own another property paid off or in good standing, the foreclosure could affect your ability to refinance that property. I've heard 3 years so 2 years is a plus!
How long can you stay in a home once it goes into foreclosure?
It depends upon the laws of the state, most states allow 30 days. Contact the clerk of the circuit court in the county where the property is located for specific information.
This varies according to state the proceedings are in. In Oregon, we were able to stay on our property for about a year. There are ways to save your property, though, too. You may have already tried bankruptcy or refinancing, maybe even called a few of the lenders that help with distressed properties. But there are often places that will help using foreclosure prevention programs. You usually have to provide a copy of the letter of intent to foreclose and other documentation. Often, letters of intent and explanation are required as well as a plan to avoid such action in the future, but it is well worth it! At one time, we acquired such loan (foreclosure prevention) and it was a no interest, payoff upon sale of property term loan. Best of luck!
This depends on the laws of your state. There are actually companies that will work with you for free to buy your mortgage away from your mortgage company and avoid your foreclosure. I would advise looking into this first.
