Foreclosure Part Of Bankruptcy

There are many folks who can no longer afford their mortgage payments on their current home and file bankruptcy and have the foreclosure part of bankruptcy.  People that file bankruptcy and have their foreclosure part of bankruptcy will one day become homeowners.  However, many folks who have the foreclosure part of bankruptcy are facing a major dilemma.  The deed is still in their name and not the mortgage lender’s name.  There are waiting period requirements after a bankruptcy and foreclosure in order for a person to be able to qualify for a residential mortgage loan.

Waiting Period Requirements: Bankruptcy And Foreclosure

The minimum waiting period for someone to qualify for a residential mortgage loan after a bankruptcy is two years from the discharge date of the bankruptcy.  The minimum waiting period for someone to qualify for a residential mortgage loan after a foreclosure is three years from the date the foreclosure is transferred out of the borrower’s name and into the mortgage lender’s name.  When a foreclosure is part of the bankruptcy, the waiting period time clock starts the date the foreclosure is out of the mortgage borrower’s name and into the mortgage lender’s name.  Just because the foreclosure is part of the bankruptcy does not transfer the deed out of the borrower’s name into the mortgage lender.  The foreclosure part of bankruptcy will wipe out the mortgage but the deed is still in their name.  As soon as your bankruptcy is finalized, you need to make sure that the bank has transferred the title to their name and out of yours.  I have so many folks who had their foreclosure part of bankruptcy many years ago but the deed is still in their name so their waiting period has not even started yet.  These folks still need to wait three years from the date the deed is transferred out of their name.  Many of these folks have made countless of phone calls to their mortgage lender and their mortgage lender are not cooperating and are in no hurry in getting the deed into their name.  Technically, you owe the home free and clear if your foreclosure was part of bankruptcy because the bankruptcy wiped out your mortgage loan.

Quick Fix Of Getting Your Name Out Of Deed

As mentioned earlier, if you have a foreclosure part of bankruptcy and are still on title, your mortgage is wiped out and you no longer owe the mortgage lender anything.  Your mortgage lender should be in a hurry to get the title transferred in their name.  However, most are not and do not care about you and do know that by delaying transferring the title to their name and out of yours, this will be hurting you.  For those who have made countless of unreturned phone calls making this request, I suggest that you write a certified letter to the mortgage lender that if they do not transfer the title out of your name and into their name that you will be listing the property and keeping all the proceeds from the sale.  This certified letter will alert the mortgage lender that you can legally do that and you will most likely see some action.  I have never seen a case where a homeowner do this where they kept all of the proceeds from the sale but I have seen many mortgage lenders act fast in transferring the borrower’s name off title and into theirs and recording it.

2015 Update On Mortgage Part Of Bankruptcy

If you have a mortgage part of your bankruptcy, you may now qualify for a conventional loan four years from the date of your discharge date of your Chapter 7 Bankruptcy and your foreclosure can be recorded at a later date for conventional loans only.  This does not apply for FHA Loans.

The information contained on Gustan Cho Associates website is for informational purposes only and is not an advertisement for products offered by The Gustan Cho Team @ Gustan Cho Associates or its affiliates. The views and opinions expressed herein are those of the author and/or guest writers of Gustan Cho Associates Mortgage & Real Estate Information Resource Center website and do not reflect the policy of Gustan Cho Associates Lenders Network, its officers, subsidiaries, parent, or affiliates.

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