Four Common Questions on Foreclosure and Bankruptcy

Is there a way to get down payment assistance on a HUD foreclosure but have a conventional loan?

My understanding is that the only way you can get government down payment assistance is through getting an FHA loan. I do not know of any government assistance programs where you can get a mortgage down payment to place on a conventional loan.

Do you have to have ‘cash only’ at a foreclosure auction?

Foreclosure laws are governed by the state in which the foreclosure occurs. The bidding procedure during foreclosure auctions vary from state to state. In some states, bidders are required to bring the full amount they want to bid in the form of cash or cashier’s check to the auction. Other states may require you to bring only a certain percentage of the bid amount to auction and pay the rest within a certain time frame if you are the highest bidder. You might want to check with the local Sheriff’s Department handling the auction to find out the terms of payment before you consider bidding.

If foreclosure proceedings are started but the loan was reinstated will it show negatively on a credit report?

Most all foreclosures begin when you are in default on your mortgage contract to make payments on the agreed loan amount. Late and defaulted payments will most likely be reported to the credit bureaus and placed on your credit report. The actions usually have a negative impact on your credit scores.

Although a reinstatement of the contract can imply you have caught back up on your payments including any interest and penalties, the credit scores will still normally be negatively impacted and reflect the late transactions in some way. If the bureaus have been made aware of the reinstatement, they can notate this on the report.

Can foreclosure and bankruptcy be taken off your credit report if you didn’t have to go through with the foreclosure and bankruptcy?

Once a bankruptcy is filed, it most likely has been reported to credit bureaus by public record vendors. The bankruptcy record can legally remain on your credit reports for up to 10 years.

You can petition credit bureaus to remove the bankruptcy or foreclosure record from their reports by providing documentation of the facts of why they should. Some bureaus might voluntarily remove the information from the report, others may not, and others may notate the information with some explanation like the bankruptcy or foreclosure has been satisfied.

Nevertheless, a problem arises for removal from the report in the fact a bankruptcy was filed in the first place. That fact might indicate there may have been default problems at one time. Defaults of payments normally violates the mortgage contract. Even though you corrected the problem, your credit has already been impacted.

The only other way you might get a credit bureau to remove the bankruptcy and/or foreclosure from a report is through litigation, a timely and costly process.

Bankruptcy laws can be complicated, and common sense indicates you might need a bankruptcy lawyer in order to help you understand how these complex laws may apply in your particular situation. Contact us today and we will help you find a bankruptcy attorney in your area.

The following two tabs change content below.