A few questions...

Back Story:
We (DH and myself) put our house on the market in Dec. of 2007. We moved that same month to a different state due to a job change. We listened to our realtor and tried to short sale it. Countrywide would not work with us, had 2 different buyers willing to close. Final offer to CW was 166,000 and a promassiory note from us for 15,000 for a total of 185,000. CW would not settle for less than 199,000. Foreclosure was finalized earlier this month. There was a second mortg. on the house for a little less that 20,000. The house did not sell at the "trustee's sale" (??). The RE agent told us that when the house is sold, there is the potential for CW to come after us for the difference.

Questions:
1) Can CW come after us for any difference? This was a Fannie Mae loan if that matters.
2) What about the 2nd mortg.?

We were in our home for seven years before this happened. We had a 5% interest rate and were never late until we had to make this job change. We are current on everything now: one credit card, one car loan (both acquired within the last 6 months), a state tax lien from our previous state that will be PIF in December and a consolation loan that will be PIF in 12 months. I have a small student loan that I have applied for a six month deferrment. All utilites, insurance -auto and renters- cable and cell phones are deducted monthly. We are currently in an apartment.

3) Can anyone give me an educated guess on how long this will prevent us buying a house here in our new state?

I realize that we will need 20% down. I have not looked at our credit report nor our FICO scores. I am pretty sure that by now they are tanked. At one point that were not due to us being able to get the car loan as well as the cc.

Thanks.

You say the foreclosure was finalized. I assume you are not on title by now. If this is true, and you never re-financed your 1st, you will not have the lender chasing you. If you re-financed your 1st at some time. You will have the lender chasing you.

You are correct. We do not have the title in our name. We did not refinance the first. We talked to the 2nd about releasing the lein on the house, and continuing to pay them while trying to get the loan from the first released for the short sale. The 2nd would not release the lien. Our understanding is that the 2nd lost out completely.

Our concern is that when/if the mortg. co. sales the house and there is a difference in the sale amount vs. the payoff amount, will the mortg. co. come after us for the difference? And if they do, when will they come after us? What will the 2nd do?

Our research has resulted in mixed reviews regarding how the foreclosure will effect our ability to purchase a house in the next 18-24 months. Due to us being current on everything except the house while this forecloure might help us get a loan. What do you experts think?

From what I see in the mortgage forum, the waiting period (at least for FHA) for a new mortgage is 3 years after a foreclosure. I'm not certain if that timeframe can be shortened under any circumstance or not, or if other lenders are more or less stringent. Might be a good Q to ask over there.

What state are you in? TX as an example is a full recourse state ie the lender can come after you for the balance. CA is a non-recourse state so they can't come after you.

The guidelines for a new loan via FHA is 3 years from the date of sale.......not the foreclosure date. So if your loan has reverted back to HUD then you will have to wait 3 years from the time they sell the house.

Conventional guidelines require 4 years,10% down and a 680 mid score.

This is only true IF you are in a nonrecourse state. We filed BK b/c our mortgage and 2nd mortgage had every right to come after us in MI.

Tammy

The house was in KY.

Here is the info from foreclosure.com about KY

Are deficiency judgments permitted in Kentucky?
Yes, adeficiency judgment may be obtained when a property in foreclosure is sold at a public sale for less than the loan amount that the underlying mortgage secures. This means that the borrower still owes the lender for the difference between what the property sold for at auction and the amount of the original loan. Deficiency judgments are only available in the event that the borrower was personally served with the foreclosure complaint and/or was served but did not file an answer.



So yes both the 1st and 2nd mortgage can come after you.

Tammy