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 fredscott
Joined: 17 Feb 2008
Posts: 4
3.55 Dollars($)
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 Posted: Sat Aug 02, 2008 8:11 pm Post subject: Impact of Foreclosure and Another Mortgage |
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I was in the process of building another home and 1/2 way through the building process the general contractor abandoned the building of the home & the developer stop working on the subdivision making it impossible for me to finish the home.
I was 1/2 way into a construction note. I was able to find another home and good mortgage a couple of months ago and decided to move on.
I am suing the builder and developer. I am considering a suit against the bank for releasing unearned funds to the general contractor.
The construction note is due and the bank is seeking full payment.
I know that if the bank foreclosure my credit will take a hit but how will the fact that I have another mortgage in good standing influence how bad that foreclosure will have over time. |
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kpatrick
Joined: 29 Oct 2007
Posts: 156
Location: Atlanta, Georgia
40.89 Dollars($)
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| Posted: Sun Aug 03, 2008 8:29 am Post subject: |
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Hi Fred,
Wow, what a mess. Unfortunately there are a lot of builders out there that are having a rough time. The good news is that you got yourself situated in a new home before the construction loan went into default.
So although if the bank forecloses on the unfinished home, and in the short run, it will impact your credit rather dramatically, but if you keep the remainder of your credit in good standing, your score will rebound more quickly.
The only thing that will cure this is time, and as time passes, it will become less relevant. But you need to keep very good records so that in the future, when you go to buy another home, you have the whole situation well-documented. You will not be able to get a conventional loan until 3 years after the date of foreclosure...
Kim
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For more information on credit repair, please visit my blog, http://creditrepair4u.wordpress.com , or my site, http://freecreditreportnow.org .
(770) 886-3140 |
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Fred
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| Posted: Sun Aug 03, 2008 6:06 pm Post subject: Thanks Kim this is Good Information |
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| Given that the bank released a signficant amount of unearned funds to the builder when he abandoned the project I did not have enough to finish the home. I am 99% sure that I will sue to stop the foreclosure process to have the bank take back the home w/o a foreclosure process to not impact my credit. The bank's failure manage the funds was probably the main reason the builder walked away. I have offered a DIL but do you know of another means the bank could take back the home. I even spent $$ out of my pocket to removed a significant lien from one of the subs that the builder didn't pay. |
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jameshogg
Joined: 20 Dec 2005
Posts: 4291
Location: nevada
509.34 Dollars($)
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| Posted: Mon Aug 04, 2008 12:21 am Post subject: RE: stop foreclosure on construction loan |
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Hi Fred,
Welcome to forums.
What I feel is, the bank shouldn't have released the funds after the builder has abandoned the project. But perhaps the bank was not aware of it. So, I doubt whether you can sue him. Better take help of a mortgage attorney.
| Quote: | | do you know of another means the bank could take back the home. |
I don't think there's any other way out except a foreclosure or a deed in lieu? also lenders don't prefer a deed in lieu compared to foreclosure as they cannot claim deficiency in the former case.
Thanks |
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