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SUEBEEHONEY70 · #1 04-21-2009, 07:11 PM

Hi all -

Most of you know my story - bought a house, got royally taken by the shady broker & real estate agent - all the "bad" things you saw last year on the news about brokers, etc - it all happened in my case. Filed Ch. 13 to try and save the house, but ended up converting it to Ch. 7 and surrendering the property later on when it became apparent that Ch. 13 was not going to help. Colossal waste of money, stress and energy. I moved out immediately upon surrendering the property, because I had no way of knowing how quickly it would be foreclosed upon, and I had already found a nice rental that was closer to work. I notified the mortgage company that I was surrendering the property and moved out.

Fast forward to today....

One year and 3 months later, the foreclosure still has not occurred. In fact, the county I lived in may foreclose on it for the taxes owed after I moved out before the mortgage company does, at this rate. I'm assuming nothing has happened yet because the mortgage companies are so bogged down with foreclosures right now. I was still receiving monthly statements from them up until about 4 months ago, so something is in the works, but there are no papers on the house door (other than from the county about the taxes) and I've received nothing in the mail.

My question is this: my credit reports (all 3 bureaus) are now showing that the mortgage was discharged in a Chapter 13/7 filing. If the mortgage company ever gets around to foreclosure on this property, will that show up on my credit report as a negative mark, or will the bankruptcy override that?

Having never dealt with this type of thing before, I have no idea what to expect here. I'm just now starting to see a slight improvement in my credit score from all the hard work I've been doing to correct the errors on my credit reports and get the accounts on the reports reflecting the correct status, etc. So I would hate to see my score take a nosedive once again due to the foreclosure being reported - but I understand that it's entirely possible that it may happen that way.

Thanks!

sassy_lil_brandy · #2 04-22-2009, 07:12 AM

Hi There...I am really sorry that you were a victim through all this. I really am.

Here's the thing...When you surrendered the property back to the mortgage holder did you put it in writing? Or did you just pick up the phone and call? On your credit report it should show that you surrendered the property back to them. If a property is surrendered back to the bank there are legal forms that you would've had to sign. The benefit of surrendering it back is it saves the bank money because they don't have to foreclose.

It will affect your credit by surrendering it back as oppose to foreclosure.

Also, most of the time, instead of surrendering the property back, you would agree to sale the house. Sometimes the bank will agree to a short-sale if it's an issue of the house not being worth what you owe on it.

SUEBEEHONEY70 · #3 04-22-2009, 04:51 PM

Nope, nothing in writing, just a phone call. And the mortgage servicer that has my mortgage never said a word about any documents being signed. It is, however, in my bankruptcy proceedings that the property was surrendered, and all three credit reports show the mortgage as going through the bankruptcy.

So my concern is that once the mortgage servicer finally gets around to foreclosing, is that ALSO going to show up on my credit report, or will the bankruptcy override that?

sassy_lil_brandy · #4 04-23-2009, 08:30 AM

It will show up as a foreclosure that was included in BK. Since you surrendered it with your bankruptcy. The lender cannot come after you for their loss.

SUEBEEHONEY70 · #5 04-23-2009, 04:46 PM

Do you think that will have any affect on my credit since the BK was already filed and discharged? Just wondering.

sassy_lil_brandy · #6 04-24-2009, 06:51 AM

Yes. It will still have an affect. But about the same as filing bankruptcy will. I can only speak regarding mortgages. I know that with us, you have to be 3 years out of bankruptcy in order to get another home loan. The same applies for foreclosure, you have to be 3 years out of forclosure as well.

#7 05-27-2009, 08:30 AM

on the credit report where the debt shows my mortgage already shows "included in bk with Zero balance" and then in the court records it shows" chapt 7 bk"
With the foreclosure (we have pending sale on Aug 20 09) does that show somewhere else now (ie in the court records section)?

desperatelyseekingsanity · #8 05-27-2009, 10:04 AM

I'm curious on this one...if a home is given up in a BK, once the BK is discharged, the house is now owned by the bank...so how can they foreclose on YOU if THEY now own the house...again, once the BK is done, the mortgage is null and the bank owns the house?! :?

crestoration · #9 05-29-2009, 03:36 PM

Once you file Bankruptcy and walk away from the home the lender has to file a motion for relief from the stay so they can proceed.
If granted then the lender can proceed with foreclosure as normal but they cannot contact the debtor or filier they can only proceed with foreclosure.
Once complete the old account aka mortgage is required to be reported as discharged in Bankruptcy.
You will have to followup with the crooked bureaus and make sure they have it listed as discharged and that they dont try an screw you and put foreclosed at the end.
So make sure and call the bureau and make them list it as discharged.
Also any defiecentcy afte the sale of the home is covered by the bk.

desperatelyseekingsanity · #10 05-31-2009, 06:51 AM

How can they foreclose on you tho? Doesn't BK null the contract and it is now owed by the bank?

#11 06-04-2009, 05:26 PM

Are you saying that if you don't surrender your home during the BK process the Mortgage Co can come after you...for what? I filed a chapter 7 also, but still live at the residence.

#12 06-09-2009, 08:50 PM

If the home was already included in the BK, i don;t think it can legally show up on your credit report, otherwise its essentially the same thing twice and i believe it to be a violation of the fair credit reporting act. i checked with a lawyer on this one... he says it should not show up, however the bank could still report it as a forleclosure on top of the IIB. you'd need to get a lawyer to go after the bank to get it removed, otherwise i think they'd blow you off... but perhaps try first.. i say all this becuase i am in the same situation...

SUEBEEHONEY70 · #13 06-10-2009, 09:59 AM

Just a follow up on this situation:

I just checked my credit report again today, and the mortgage shows up on all three bureau reports as "included in bankruptcy", which was discharged last summer. The word "foreclosure" does not show anywhere on any of the 3 reports.

To date, I still have received NOTHING from the mortgage company or their servicing company regarding foreclosure. I was receiving regular monthly statements up through November or December of last year, and then they stopped, so something apparently happened (finally).

There are no papers on the door of the house from the mortgage company or servicer - but I DID receive a notice from the county where the property is located, stating that the property was being foreclosed on by the county treasurer due to unpaid taxes and would be sold on the courthouse steps for the amount of the past-due taxes (about $1500). So the county is getting their hands on this before the mortgage company is.

So that's the update...in a nutshell. Someone is going to probably end up buying that property for little to nothing, which is ok with me - they can have it. I got royally taken on it when I bought it, didn't want it in the first place, but was strong-armed into buying it by an unethical real estate agent who made threats of legal action if I didn't buy it, and I believed him. I know better now - much better - and no one was happier than I was to see HIS OWN HOUSE in the paper for foreclosure about a year later. He took advantage of the fact that I didn't know anything about the home-buying process and pushed me into buying something I couldn't afford and tried to back out of. So what goes around comes around.

Thanks to everyone for their tips and advice - I truly hope my situation being reported here will help someone else avoid getting into the same situation, or will help them deal with it if they're already there.

desperatelyseekingsanity · #14 06-10-2009, 10:44 AM

Hey...if you want to buy a house cheap...go to the tax sale and pay the back taxes...the bank owns the house now, and I'll bet with all the foreclosures they have on hand, they probably missed this one...haha

I believe a tax sale trumps the mortgage...you could get the house free and clear!! :wink:

SUEBEEHONEY70 · #15 06-10-2009, 11:19 AM

LOL desperately! Trust me, you, nor I, nor anyone else wants this house. They saw me coming and pushed me into buying something that wasn't worth the paper the mortgage was written on. They lied to me, got the appraiser in on the deal and she falsified the appraisal to make the house appraise at the level THEY wanted, instead of what it was truly worth (about $20,000 as opposed to the $70,000 she appraised it at), and the place truly needs to be torn down and a new house put in its place.

It's on a postage-stamp sized lot with a crazy cat lady (and I do mean CRAZY, like MEAN CRAZY) on one side who tore her roof off and dumped all the debris in my driveway and yelled at my kids if they even looked at one of the myriad of cats she let overrun the neighborhood. The driveway to my house was literally against the side of her house - that's how close the houses are together. The floors in the house are so crooked that if you put a marble at one end of the room, you'd never see it again.

Trust me, no one wants it. :?