If You Have Foreclosure As Part Of Your Bankruptcy
If you have filed a personal bankruptcy, there is a mandatory 2 year waiting period from the date of the discharge of your bankruptcy in order for you to qualify for a new mortgage loan. If you have a prior foreclosure, deed in lieu of foreclosure or short sale, there is a 3 year mandatory waiting period either from the date of the short sale or the recorded date of the foreclosure or deed in lieu of foreclosure. Remember that the waiting period time clock on a foreclosure or deed in lieu of foreclosure starts from the recorded date of the foreclosure or deed in lieu of foreclosure and not the date you turned the keys over or signed the foreclosure paperwork. If you have a foreclosure as part of your bankruptcy, the waiting period is two years after the discharge date of your bankruptcy but since the waiting period is three years for a foreclosure, your mandatory period will be three years from the date of the recorded date of your foreclosure and NOT your bankruptcy discharge date.
Problems That Can Arise If You Had A Foreclosure As Part Of Your Bankruptcy
Thousands of folks who have a foreclosure as part of their bankruptcy think that the foreclosure is finalized and that the waiting period starts the date of the bankruptcy discharge date. That is not the case. Even if you have a foreclosure as part of your bankruptcy, your foreclosure waiting period time clock does not begin until the foreclosure has been recorded on the county recorder of deeds and the foreclosure has been fully stamped and recorded. The note of your mortgage might have been zeroed out and you might not owe anything on your note and have no liabilities but the foreclosure waiting period start date is not effective until the recorded date has been recorded. Many mortgage lenders are in no hurry in transferring the deed of your foreclosed home into their name and recording it.
Mortgage Part Of Bankruptcy
There are dozens of calls I get everyday where folks had a foreclosure as part of their bankruptcy and have passed their 3 year waiting period but do not qualify for a mortgage loan because the mortgage lender has not transferred the deed out of the borrowers name into the lender’s name. Some of these mortgage lenders have not even transferred the deed over their names even after 3 years. This ultimately hurts the person who had a foreclosure as part of their bankruptcy because their waiting period time clock has not even begun yet.
What to do if mortgage lender will not transfer deed into their names and record the deed in the county records if you had a foreclosure as part of your bankruptcy
Your bankruptcy attorney should be responsible to make sure that your mortgage lender has transferred the deed to the lender’s name and have it record it on the county recorder of deed if you had a foreclosure as part of your bankruptcy. Many bankruptcy attorneys did not do so and the client ends up getting hurt since it prolongs them qualifying for a mortgage loan. If you have a foreclosure as part of your bankruptcy, you no longer owe any money on your home. The house is free and clear. You offered the bank back the deed to your home. However, mortgage lenders think they are smart and will try to punish you by not transferring the deed back to their name and recording the deed in the county recorder of deeds. Technically, you own the home free and clear without a mortgage since the mortgage and note was part of your foreclosure as part of your bankruptcy. If constant calls to the lender goes unanswered, write a certified letter to your lender stating that you are planning on selling your home. List your home with a realtor and put it on the market. If the mortgage lender still does not respond to you and transfer the deed into their names, the house is yours. If the home sells and closes, technically, you are entitled to all of the proceeds to the home. I will bet any money that the lender will not let this happen and you will get a call back and have the deed to your home transferred over their name in a heart beat.
2015 Conventional Loan Update On Mortgage Part Of Bankruptcy
If you have a mortgage part of bankruptcy, the waiting period to qualify for a conventional loan starts from the discharge date of bankruptcy and not the recorded date of foreclosure effective August 2014.