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  1. #1
    Join Date
    Jun 2012

    Default Foreclosure After Bankruptcy

    My question involves a mortgage in the state of: Illinois

    I filed bankruptcy in Dec 2010 and did not reaffirm my mortgage. Since the bankruptcy I have not been late or missed a payment, however none of the credit bureaus are reporting my payments due to the bankruptcy. Currently my principle balance on the loan is 190,000 and the homes in my subdivision are selling in the 130 - 150k range.

    I am a single parent of 3 and the mortgage and all the kids expenses are too much for me to afford staying in this house. So my questions are:

    1. If I stop making payments will it affect my credit score? I'm assuming no since my mortgage hasn't been reported since the bankruptcy
    2. If I stop making payments what is the estimated time from your 1st missed payment til the date I need to move from this house? With all the foreclosures going on I'd expect the true time may be longer than the "book" time - so is there an estimate for Illinois' turn time currently?
    3. If my home gets foreclosed would that be reported on my credit or marked against me? Since it was included in the bankruptcy and not being reported i'm hoping it won't and would allow me to purchase a new home (albeit much cheaper).
    4. If I start missing payments do I have to pay the property taxes? Currently my mortgage company pays the taxes so if they continue paying the taxes would I owe them back? I assume if they don't pay the taxes they would be my responsibility.
    5. Same question as above but regarding the home insurance (currently paid by the mortgage company)?
    6. If a foreclosure is marked against me - how much time must pass before I can purchase another home going through FHA? Conventional?

    Would appreciate any guidance


  2. #2
    Join Date
    Sep 2010

    Default Re: Foreclosure After Bankruptcy

    1. It should not affect your credit score, the loan is no longer your obligation
    2. That is entirely up to the bank. It could be as fast as eight months, or as long as the bank wants to string it out.
    3. The foreclosure should not affect you.
    4. The house ownership is still in your name, you must continue to make the property tax payments until it is sold (either you sell it or the bank takes it over).
    The mortgage company doesn't "pay" the tax. They collect the money from you and pay the tax man with it.
    5. If you have insurance, you are responsible to pay it.
    6. As pointed out, the bigger issue is how bad the bankruptcy and the stuff leading up to it counts against you. There's not really a fixed time period. FHA requires two years to have passed from the date of discharge, but the lending bank may not issue it still.

  3. #3
    Join Date
    Jun 2012

    Default Re: Foreclosure After Bankruptcy

    Thanks flyingron for the quick and helpful response.

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