Bankruptcy and Foreclosure Qurestion

[Mewildman]

What is the name of your state (only U.S. law)? Oregon
I posted a question about our home foreclosure and bankruptcy in the Bankruptcy Section and didn't get any helpful replies. figured this may be a better place to ask. My wife and I were forced to file bankruptcy in early 2014 after she was laid off and I was transferred across the state. We could not afford to pay rent in our new town and our house payment for the home we had to move out of. when we filed we listed the home and indicated that we were surrendering the property. The bankruptcy was discharged in May of 2014 and we didn't hear anything about the house and figured it was all done. Several months to a year later, we start again getting documents from the mortgage holder (Wells Fargo) saying foreclosure proceedings were in progress. We spoke to them and they acknowledged that the property was listed in the bankruptcy, but would not tell us anything else.

The property finally foreclosed over two years after the bankruptcy discharged in July of 2016. We are now in good financial standing, and are wanting to again purchase a house and are being told that we are okay as far as the Bankruptcy, but because it has been less then three years since the foreclosure we will not qualify.

My question is why are we being double hit for both the Bankruptcy and the foreclosure? We listed the property and wanted to surrender it to the bank, so I would think they didn't even need to foreclose. Before we filed we tried to short sale, we attempted to do a Deed in lieu, but Wells Fargo would not work with us in any way.

 

[FlyingRon]

It's not. Keep it all in the same place. If you have information to add, do it there.

You can't force the bank to foreclose. Even if there had not been a bankruptcy, these days the banks are often slow to take on these properties that will likely end up sitting in their own REO inventory and incurring them additional liabilities.

 

[LdiJ]

What is the name of your state (only U.S. law)? Oregon
I posted a question about our home foreclosure and bankruptcy in the Bankruptcy Section and didn't get any helpful replies. figured this may be a better place to ask. My wife and I were forced to file bankruptcy in early 2014 after she was laid off and I was transferred across the state. We could not afford to pay rent in our new town and our house payment for the home we had to move out of. when we filed we listed the home and indicated that we were surrendering the property. The bankruptcy was discharged in May of 2014 and we didn't hear anything about the house and figured it was all done. Several months to a year later, we start again getting documents from the mortgage holder (Wells Fargo) saying foreclosure proceedings were in progress. We spoke to them and they acknowledged that the property was listed in the bankruptcy, but would not tell us anything else.

The property finally foreclosed over two years after the bankruptcy discharged in July of 2016. We are now in good financial standing, and are wanting to again purchase a house and are being told that we are okay as far as the Bankruptcy, but because it has been less then three years since the foreclosure we will not qualify.

My question is why are we being double hit for both the Bankruptcy and the foreclosure? We listed the property and wanted to surrender it to the bank, so I would think they didn't even need to foreclose. Before we filed we tried to short sale, we attempted to do a Deed in lieu, but Wells Fargo would not work with us in any way.

Yes, this should have all been part of the bankruptcy but many mortgage companies have been very lax in taking actual possession of property until sometimes many years after the fact. They cannot take possession without a foreclosure process. In the old days that foreclosure process would take place immediately following the bankruptcy. In these uncertain times again, it sometimes happens years later.

The rules for new mortgages are so much tighter than they were even 10 years ago, so new mortgage companies are much pickier about who they will lend to.

You may have to wait a few more years before you can buy a house again. It might even be a blessing in disguise that you cannot buy right now. The last thing that you want is to be in another situation where you cannot pay your mortgage. You might want to wait until you have considerable more savings than what you need for a down payment, so that you have something to fall back on if you have to move or one of you loses their job.