Buying A Home
mindboggledinAR
member
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Buying a house after bankruptcy
Hi nesters,
I have not been here in quite a while. I have been divorced now for 6 years, and needless to say, my name is still on the mortgage with my ex. He cannot income or credit qualify to remove my name. He is suggesting that we short sale. I have been told a short sale is basically a foreclosure. I am contemplating a bankruptcy, but want to be sure after some time I will be able to purchase a home and eventually another car.
Has anyone filed bankruptcy, then bought a house?
I have not been here in quite a while. I have been divorced now for 6 years, and needless to say, my name is still on the mortgage with my ex. He cannot income or credit qualify to remove my name. He is suggesting that we short sale. I have been told a short sale is basically a foreclosure. I am contemplating a bankruptcy, but want to be sure after some time I will be able to purchase a home and eventually another car.
Has anyone filed bankruptcy, then bought a house?
Re: Buying a house after bankruptcy
For credit purposes, I am guessing that a short sale would not be nearly as bad as a foreclosure. A short sale happens when the house is underwater. No payments get missed (assuming), but now the mortgager is being "shorted" the difference between the sale price and what is remaining on the loan. It will still be a big negative mark on your and your ex's credit.
However, a house is foreclosed upon when payments have been missed for months or even years. Then the house is sold...usually for even less than a short sale...and the mortgager is still shorted the difference. Except now the difference is bigger. That is a lot of serious, serious bad stuff on the credit report. Especially the months of missed payments. I'd think it would be tough to get a home loan for many years in this situation...but maybe not necessarily many years for a short sale, which is one bad mark vs. many bad marks.
I've heard of people buying houses/cars after a bankruptcy. It will vary by bank, but I think the soonest required is a minimum of one year after the bankruptcy. Though I'm sure most require much longer. Oddly enough, in a way, a bankruptcy is positive for a lender because (I think) it's 15 years before a person could file for one again. So that takes away a bit of risk for them.
If I were you, I'd meet with a few loan officers from different banks and find out what their policies are. And/or if you see an attorney to discuss your bankruptcy, he/she could give you advice on that also.
I'll give your ex a little bit of the benefit of the doubt and assume he just doesn't know what a short sale is.
If he wants to sell the house, great!, you all should sell the house. As long as it sells for more than the value of the remaining loan, it will not be a short sale and have no negative effect on your credit.
In fact, depending on what your divorce decree says, if there is a profit you might be entitled to half of it.
If your ex can pay the mortgage on the home, what about doing a quit claim deed? Basically, it's a way to legally quit being on the deed. This would remove any rights to any potential profit on any sale on it in the future. IF Wells Fargo also approves it, then you could get your name off of the mortgage loan too.
Only do the quit claim deed IF WF allows you to come off the mortgage, though.
What about discussing all this with a real estate attorney? I don't know enough about this sort of stuff, but if a real estate attorney isn't the correct person to help you, they could probably refer you to someone who can.
Is it your divorce attorney that's doing the two contempt of court filings? If so, and it's still not pushing the courts to act, is it possible you need a more aggressive attorney?
This is not legal advice, as I'm not authorized to give it, but I'm going to have to agree with OP. If I were in her shoes, I would file for bankruptcy, too. (Fellow paralegal, here). Our society puts too much of a nasty stigma on filing for bankruptcy like its an awful thing, when in reality, it should be looked at as a new start. No, it's not pleasant, but the ends justify the means. I'm not saying OP should make a habit of bad habits, (meaning filing more than once and continuing to be irresponsible). Perhaps OP wasn't the one who was irresponsible, to begin with. If anyone has gone through one, you know they expensive. But, this should be more or less a learning experience and a fresh start.
I was just watching a Judge Judy where a woman was suing her father's previous tenant after the house had been sold.
It came out in the episode that the house had been part of a divorce between her father/mother, but he was allowed to stay living there and they would split the proceeds whenever the house was sold in the future. And, for a number of years he did live there and paid the mortgage. But then he moved and rented the house out...but didn't give any of the rent money to his ex-wife.
She tried to get him to sell the house, but he wouldn't. So she took him court and was than able to sell the house with the "court's signature"...so to speak...in place of his. She still had to divide the proceeds, of course, but I found it interesting a court could step in and allow her to sell the house without his agreeing to it.
It's a shame it has to come to that since it sounds like the best option for both of you is to just sell the house.
But good luck and good riddance to him!