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Mortgage payments after bankruptcy question - Any mortgage people?


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7 replies to this topic

#1 Leesa926

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Posted 18 September 2017 - 07:44 PM

So I have a question about my payment history outside of bankruptcy.  Sorry so long.

 

Here are the basics.  I was discharged in March 2017 and I know it will take a while to get another mortgage which I am fine with.  I DID NOT reaffirm the mortgage.  Shortly after the discharge my job moved me 2 hours away.  Since then I have been paying on the mortgage as well as the rental.  We are getting the house ready for sale and had the roof replaced etc.  I am hoping we can sell it in the next 2-3 months.  I won't make a lot but it will pay off the mortgage at least.  Our credit is actually MUCH better since the bankruptcy as the issue was mainly high utilization.

 

The mortgage was discharged in bankruptcy but we keep paying to stay in the house.  I know technically I don't have to pay and they can foreclose (we would sell before that happens) but I didn't want any bad marks for when I shop for a new mortgage in 2-3 years (or however long it takes to qualify after a bankruptcy).

 

My problem is this - money is getting extremly tight with the repairs, staging, etc we are making to the home and now with IRMA (I am in Florida) my next month or 2 pay check will be significantly less - (I get salary + bonus) plus costs to tree damage, etc.  (nothing major that would be covered but still a mess).  I already started charging on a credit card (have PIF but worried it will catch up)

 

I was told in my research to keep paying even though it does not report on my credit report so when I do go for another mortgage I will have positive payment history.  Someone said even 1 late would hurt me badly.

 

My question is if I am late by 2 possibly 3 months (example house sells in Nov and I don't pay Sept and October) how bad will this be in me trying for a mortgage later on?  

 

I am hoping my scores by the time I try to buy again will be mid 700's (its close to that now).  I just don't want to make a stupid mistake now that will hurt me terribly in the future.

 

Mind you the banks are not reporting lates to the credit bureaus or charging late fees at least for this month but since mine doesn't report anyway that doesn't help.

 

Thanks again I hope I am asking this right.  Just really having a hard time staying afloat and wonder if I am thinking too much of something that will not be as major as a factor as I am thinking.  Part of me says I have 10 years positive payment history, then a bankruptcy so 2-3 lates shouldn't be the be all end all... the other part doesn't want to screw up my chances of owning another home.  


Edited by Leesa926, 18 September 2017 - 07:46 PM.

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#2 Kuuner

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Posted 21 September 2017 - 11:32 AM

By the time your are able to finance a home purchase again, the 2 or 3 payments you fall behind now will be a small blip on the radar screen then. It won't show on your credit and when you get a VOM (Verification of mortgage), they usually only go 24 months back so it might not even show up on that.


Edited by Kuuner, 21 September 2017 - 11:32 AM.

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#3 DebtDave

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Posted 21 September 2017 - 02:13 PM

What is a VOM? Can that work in place of a future mortgage post BK if your mortage is no longer reporting on your reports?


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#4 Kuuner

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Posted 22 September 2017 - 10:24 AM

What is a VOM? Can that work in place of a future mortgage post BK if your mortage is no longer reporting on your reports?

as I put in parenthesis...a "Verification of Mortgage". It's a form that lenders send out to the servicers to fill out and return, that lists the last 24 months of payment history on the loan. it is a form used when there is not current and reported information on the credit report.


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#5 Brian B The Loan Professor

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Posted 22 September 2017 - 10:47 AM

The issue is a little more complicated than what you are thinking

By including the home in the BK it will be viewed more like a foreclosure so the timeline for eligibility may be longer -

To avoid that you usually have to reaffirm - 

selling it and eliminating the debt will go a long ways to helping your situation


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#6 Kuuner

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Posted 25 September 2017 - 11:03 AM

The issue is a little more complicated than what you are thinking

By including the home in the BK it will be viewed more like a foreclosure so the timeline for eligibility may be longer -

To avoid that you usually have to reaffirm - 

selling it and eliminating the debt will go a long ways to helping your situation

I respectfully disagree with that. Including the home in the BK is standard. Reaffirmation is the exception to the norm. The VOM will show what they did with the property after the bk. THAT might be the "viewed more like foreclosure" ahaa moment but not the non reaffirmation aspect of the BK.

 

OP has two years minimum no matter what but the non reaffirmation should be a non issue. That said, if the mortgage goes into default between now and when they want to purchase, while it might (won't) show up no credit, it will show up on a VOM and that will be delinquency post BK that will haunt them like a foreclosure.

 

On a side note, I just closed my refinance last month, with a BK, without reaffirmation, and simply provided a VOM to fill in the blanks when my mortgage stopped reporting. Granted, my VOM was clean for the past 24 months (Was never late since origination).


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#7 Brian B The Loan Professor

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Posted 25 September 2017 - 11:13 AM

Correct - if no payments missed it is not an issue - it isnt the reaffirmation that is the problem as much as the usual lack of payment sometime in the process - that combined with BK kicks in the foreclosure timeline


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#8 Kuuner

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Posted 25 September 2017 - 04:09 PM

Correct - if no payments missed it is not an issue - it isnt the reaffirmation that is the problem as much as the usual lack of payment sometime in the process - that combined with BK kicks in the foreclosure timeline

Thanks for the clarification...we are on the same page.


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