Charles asks…
Will I ever be able to buy again after a foreclosure?
I just lost my home to a foreclosure. Does anyone know if I rent for a couple of years and pay well, is it possible to buy again even from an owner finance? I am located in San Antonio, Texas.
admin answers:
Most subprime lenders, no, forgive me, ALL subprime lenders will require 2-3 yrs seasoning of a NOD, Short sale, or foreclosure for maximum financing, 100%. There is no way around it. Typically the less the seasoning, the lower the LTV or Loan to value. I spent 10 years as a manager and VP for several subprime companies and I know it like the back of my hand. The last lender to allow less than 2 years on a foreclosure for maximum financing is now defunct. Even the most aggressive lenders will barely allow for above 95% CLTV or combined Loan to value should you find a seller second. If you have a down payment your options become greater.
An option; take it for it what it’s worth: Find a property with a seller willing to lease with option to purchase or carry the note. Lock him in at todays price for say 1-2 years and…record the transaction with your county. Pay with check each month and on time. After 12-18 mo. Contact a broker and have him look at refinance options. Refinance?? I don’t own the property, you say. In the eyes of the lender you do. So assuming you have enough equity in the property from what it’s woth vs. What you owe the seller, you may find yourself able to refinance at a higher LTV. Many will allow 85% and a few will go to 90%. Some will allow c/o, some limit you to 5k and others are strictly rate and term. The good news is you get another shot at home-ownership and with the refi, you build another credit trade.
Also, if possible, take this time to work on any other credit issues you face.
Donna asks…
I need someone’s help with a foreclosure question in Texas?
Due to my loss of employment several of months ago, my home is going into foreclosure. I thought of filing bankruptcy, and have even paid the lawyer his fees, but since I cannot find a job after looking daily, I am being told the Bankruptcy court will not allow me to file, neither will I get my money back. We are talking a lot of money here that was paid. My home goes up for sale at the courthouse on September 1st. How long do I have to remain in my home while I find something I can afford??
admin answers:
You signed a contract with a lawyer and paid him. It is his money. Period. Bankrupcy court will not stop you from filing. Period. The moment the house is sold in forclosure, you are out. Period
Ruth asks…
In Texas when a stay on foreclosure is lifted in court must a new foreclosure proceeding be filed?
l live in Texas and have filed Chapter 7 bankruptcy. The lawyers for my mortgage company have filed a motion to lift the stay on the foreclosure of my home. I am not going to fight the stay in that I have another home leased and I am preparing to move. However, I need to know if once the stay is lifted can they proceed with foreclosure immediately or must they file for foreclosure again? In other words do I have to get out of the house before the stay is lifted or will I have a few weeks after the stay is lifted?
admin answers:
Vacated; refile.
Lifted- pick up where it left off.
Sandy asks…
Foreclosure in Chapter 7?
I live in Texas and my home is going up for foreclosure and I wanted to know if I file chapter 7 will I still be responsible for the payments and how does the foreclosure report to creditors? I have a first and second mortgage, and found out I don’t have any equity in the home. There is no way I can pay for the house and pay the payment plan if I file for Chapter 13 due to my current employment status (laid off and then took a huge pay cut at new job). I am not sure what to do but I don’t have any family to borrow money from to keep the house. If I decided to file chapter 7 instead of chapter 13 will I ever be able to buy a house again?
admin answers:
A foreclosure will affect your credit rating in a big way, but bankruptcy will affect it longer and to a much greater extent. The new bankruptcy laws allow you to file Chaper 7 instead of 13 if you pass a test that shows you do not have the assets or ability to pay your unsecured creditors. I am not an attorney, but have recently gone through bankruptcy and now foreclosure.
I strongly recommend that you go to a non-profit website called hummingbirdcreditcounseling.org. They are approved for most federal bankruptcy districts. Take the first counseling session. You can take it annonomously and it is free. It will go over all alternatives – pros and cons – for your situation. If you end up filing for bankruptcy I recommend you use hummingbird for your required counseling.
I understand that now if you go chapter 7 and make more than the average income in your area, you are required to be audited by a CPA. My trustee was very thorough & the process, although very professional, was grueling – much worse than an IRS audit.
Chapter 13 would have been rough for me. It was much more expensive – like having the court and your attorney babysit you for 3 years.
IF you decide to consider bankruptcy, be sure to hire an attorney, and one that specializes in bankruptcy. I bought a book and the information/instructions were very different than what my attorney did. It was difficult for me to come up with the attorney fees (they want payment before filing because attorney fees can be included in bankruptcy), but worth every cent!
The court looks very carefully at your expenses for 90 days prior to filing. Be sure to not charge anything during that period. I owed a small balance from opurchases within 90 days of filing. My attorney said the bank would not fight it due to the small amount. They did & we had to settle with that bank.
They also look carefully at hiding assets and giving away stuff, especially one year prior to filing. Don’t play games with the bankruptcy court. Honesty will get you the fresh start that the law was intended to give, if you really need it. Deception will get your case thrown out with a possibility of criminal prosecution. And you WILL get caught.
Now on credit recovery? With foreclosure some mortgage banks will work with you after a couple of years, but you’ll likely pay a higher interest rate because you will be a higher risk. Pretty much the same is true with bankruptcy. Mortgage banks allow letters of explanation as a part of he underwriting process.
I got a credit card right away from a bank that was not listed in the bankruptcy. I had an excellent credit rating for years prior to the bankruptcy. After a couple of years some banks will give you a credit card with a decent rate. Many banks, especially the ones that carry retail store specialty cards, will categorically turn you down for any credit if you have anything negative on your credit rating. Foreclosure and other negatives are on the ratings for seven years. Bankruptcy stays on for ten years. Also, anytime you apply for a car or house loan, you may have to tell them about the bankruptcy on the application – after ten years.
But having a great credit rating isn’t everything. I blew thousands of dollars in savings making minimum payments, in an effort to preserve my credit rating. I also bought a house that was a lot more than I could afford, using “creative” financing, which is both expensive and risky.
David asks…
Don’t our troops deserve more than this? Are our troops thought of as merely ‘throwaways’? Why so hard to help?
those who sacrifice so much, including their lives?
~~~~~~~~~~~~~~~~~~
AP IMPACT: Army charity hoards millions
FORT BLISS, Texas – As soldiers stream home from Iraq and Afghanistan, the biggest charity inside the U.S. military has been stockpiling tens of millions of dollars meant to help put returning fighters back on their feet, an Associated Press investigation shows.
Between 2003 and 2007 — as many military families dealt with long war deployments and increased numbers of home foreclosures — Army Emergency Relief grew into a $345 million behemoth. During those years, the charity packed away $117 million into its own reserves while spending just $64 million on direct aid, according to an AP analysis of its tax records.
Tax-exempt and legally separate from the military, AER projects a facade of independence but really operates under close Army control. The massive nonprofit — funded predominantly by troops — allows superiors to squeeze soldiers for contributions; forces struggling soldiers to repay loans — sometimes delaying transfers and promotions; and too often violates its own rules by rewarding donors, such as giving free passes from physical training, the AP found.
AER was founded in 1942 to soften the personal financial hardships on soldiers and their families as the country ramped up its fight in World War II.
Today, AER’s mission is to ease cash emergencies of active-duty soldiers and retirees, and to provide college scholarships for their families. Its emergency aid covers mortgage payments and food, car repairs, medical bills, travel to family funerals, and the like.
Instead of giving money away, though, the Army charity lent out 91 percent of its emergency aid during the period 2003-2007. For accounting purposes, the loans, dispensed interest-free, are counted as expenses only when they are not paid back.
During that same five-year period, the smaller Navy and Air Force charities both put far more of their own resources into aid than reserves. The Air Force charity kept $24 million in reserves while dispensing $56 million in total aid, which includes grants, scholarships and loans not repaid. The Navy charity put $32 million into reserves and gave out $49 million in total aid.
AER executives defend their operation, insisting they need to keep sizable reserves to be ready for future catastrophes.civilian charities for service members and veterans say they are swamped by the desperate needs of recent years, with requests far outstripping ability to respond.
According to 2007 U.S. Census Bureau figures, 1.3 million veterans — or 6 percent — lived in poverty, with 537,000 unemployed.
“I have so many people who are losing their homes, they’re behind on their mortgage payments, they’re losing their jobs because of PTSD (Post-Traumatic Stress Disorder) or the medication they’re taking — and the Army Emergency Relief can’t help them,” says Outreach Director Sema Olson at U.S. Welcome Home Foundation, which finds aid for combat veterans.
admin answers:
They do deserve more than that. This is what happens when people start wars that they can’t afford.
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