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7000 Peters Creek Rd., Roanoke, Virginia
1-866-260-5994 |
CCCS of Southwest Virginia |
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Foreclosure |
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I owe more on the home than it is worth. How would a voluntary
foreclosure work with a mortgage?
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Your question illustrates
the danger of 100% plus financing. Consolidating debt with a home equity loan
may sound like a good idea at first, but you have to be careful when trading
unsecured debt for secured debt. Unfortunately, a foreclosure is a
foreclosure—voluntary or not.
In a foreclosure, the bank takes
possession of the home and sells it to the highest bidder. They will then apply
the proceeds of the sale to the mortgage owed. If the amount is not sufficient
to cover the loan, you are responsible for the difference (called a “deficiency
balance”). In addition, the foreclosure will remain on your credit report for up
to seven years, making it difficult to obtain future credit at reasonable
interest rates.
My advice is to make every effort to pay your current
mortgage as agreed.
Susan
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I recently received notice of a foreclosure through my mortgage
company and was seeking some advice on procedures which might be able to help me
stop or put a forbearance for 3-4 months on my payments and possibly put them
towards the back of my loan. I recently was approached by a door-to-door sales
real estate broker claiming he would be able to negotiate with the bank and he
would do this for me at a set fee of $1400. My request for assistance is: would
it be a quicker way to do with what this broker mentioned, or is filing for
Chapter 13 an option which I was advised not to do, or a real concern of, can I
proceed by myself of filing the necessary forms for a "special forbearance" and
negotiate myself with the bank.
Steven
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Steven,
The first
thing you need to do is call your mortgage company yourself. Open communication
is very important. Be wary of anyone coming to your door offering unsolicited
services. Make sure you understand exactly what you are buying, $1,400 is a lot
of money.
Many mortgage companies have programs already in place that
will accomplish the same thing this door-to-door broker is selling.
You
could also speak with a certified credit counselor at 800-762-2271 for free,
professional advice.
Good Luck,
Susan
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If I had an forclosure on a house, how long does it take for me
to be able to aquire a new home? It has been one year that my house was
forclosed on. What is the average waiting period and how much will the mortage
company be willing to finance me for?
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The foreclosure will
remain on your credit report for up to seven years. Since it has only been one
year since the foreclosure, your ability to get a loan at a reasonable interest
rate will be affected for quite some time.
In the meantime, keep paying
your bills on time and as agreed. As the foreclosure ages and you continue to
use credit wisely, your chances of obtaining a loan will
improve.
Susan
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In 1997, I had a VA loan home foreclosed on and had a monstrous
federal tax lien. I am currently on a repayment plan with the IRS. I interested
in trying to buy another house, but I don't know how to go about it.
Benjamin
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Benjamin,
When you
take out a mortgage loan, you are borrowing a large amount of money. The lender
wants to be sure you are able to pay it back. To do this, they will review your
past payment history. With a foreclosure and tax lien, it will be nearly
impossible for you to obtain a mortgage loan at a reasonable interest rate. My
advice is to wait until your credit situation improves.
Susan
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In 1997, I went through a legal separation, had a VA loan home
foreclosed on, and had a monstrous federal tax lien. I am currently on a
repayment plan with the IRS. I aminterested in trying to buy another house, but
I don't know how to go about it.
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With a recent home
foreclosure and an IRS tax liability, it will be extremely difficult, if not
impossible for you to secure another mortgage loan. But you can try by calling a
few mortgage companies. To get a list of mortgage companies to call, look in
your phone company yellow pages under "Mortgages" and start calling. Good
luck.
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CCCS, A Division of Money Management International
Regional Headquarters - 7000 Peters Creek Rd., Roanoke, Virginia
Corporate Address - 9009 West Loop South, Seventh Floor, Houston, TX 77096 |
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