How to resolve foreclosure?
Question:
Ok, My boyfriend foreclosed on a house about 2 years ago now after trying to sell it for about 5-6 months. This all spiralled from losing his job when his company shut it's doors. So yeah he tried everything he could to keep it and it would not sell so his only option at that point was walk away. The bank was very understandable and worked with him as best they could through it all and they told him just to move out quietly when it became obvious it was not selling and he was more and more behind.
So he moved out and never heard a thing afterwards, they never took him to court, he never recieved a notice saying he owed anything, nothing. They sold the house shortly after he moved out. He has been renting ever since and he has a very good job now.
Well, now we want to buy a house together so my question is, what should he do now? a lawyer thinks he should file bankruptcy, but its been 2 yrs (he's not in trouble now) I think that would make things worse...
Answer:
Bankruptcy isn't going to help anything now, just create problems for years to come.
How badly his credit is effected depends on what the bank reported. Pull his free credit report and then talk to a real (brick and mortar) bank about what kind of loan you qualify for.
Bankruptcy makes no sense at all.
DON'T file bankruptcy.
it could still be on the books he could find out by checking his credit
Im sure an attorney would be better informed than me, but if it was me (based on just what youve said)I think Id go ahead and just buy a home if this isnt ruining his credit, and then once Im in a house IF they sue me Ill declare bankruptcy then since I will have gotten a good interest rate on my home, which is about the best reason for good credit. And if they dont sue you can always declare bankruptcy right?
Credit follows you around for a lifetime. Declaring bankruptcy is very difficult now and the credit woes will still follow your boyfriend.
Perhaps a better questions is why you are buying a home with a delinquent boyfriend to whom you are not even married. You should continue to rent until you can make a firm stance on your relationship. Then bond yourselves financially. You will get better tax breaks this way anyway.
Now that I think about it, you minors shouldn't even rent! You will probably skip out on those payments too. Shame, shame, shame!
If your boyfriend is not in financial trouble now, then I would not suggest filing for bankruptcy. Usually people do that to stop a foreclosure. If he had filed bankruptcy before the bank foreclosed on the property, he could have kept his house. After 2 years past the foreclosure some banks will still finance him. I think the best solution is to put the mortgage completely under your name because that will give you a better rate and more options. Then, you can just add him onto the title and you both would have ownership interest in the house without having to use his poor credit.
Before you try to buy something else, make sure he knows exactly whats on his record. many people do the mistake of thinking that everything is okay when its really not, and for their luck they're agent doesnt care as long as they buy. Please make sure, everything is good to go and if theres anything he can do to improve his score. Shop around, dont settle with the first option they give you. Many times, lenders only offer a few selected programs because its better for the lender not for the client. Another thig, lenders have changed their programs, some programs are no longer available, and the ones that are available may be hard to get. If you wish to get a program talk to you lender to see what you can do to obtain that program, if its necessary to wait a few months, then wait, better to wait and get a low interest mortgage than something quicker but higher interest. & never buy more house than you really need, even if you qualify for it. Only buy what you need. Dont let your agent convince you.
WHY would a lawyer recommend bankruptcy? Does your boyfriend have a ton of debt? (You're right-- it won't help anything.)
We had a foreclosure about 2 years before we bought a house. I think it's all about money. If you're making enough $$... nobody cares much about your past. We didn't have a problem getting a mortgage, but the interest was pretty high. The more downpayment you have, the easier it'll be to get a loan and on better terms. I'd start saving as much as possible. And, the farther the foreclosure is in the past and the better he's able to get his credit score, the better terms you'll get.
I'd wait about a year-- use this next year to save and gets debts paid off and make your credit look good. Don't open any new accounts. And don't be in a rush. I wish we'd have waited longer. Owning a house isn't worth paying too much in interest rates so that you're always strapped for cash.
things an adviser needs to know--
your credit
how long this guy in your life?
your income
his current income
after that has been analyzed
ways to buy a house that are unconventional;
lease option
build one
trade for one
find more partners with cash and credit
and more
will help further if asked
[my peers who have already answered
gave excellent advice!]
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