Posted on: 25th Aug, 2012 09:02 am
4 years post foreclosure, in Michigan. After losing our family business in 2008 our home was lost. 1st mortgage was settled through foreclosure sale of our home, 2nd received nothing. New lenders are afraid that they can sue us and cause more than a blemish on our credit report. Can they garnish wages, take any new home we should buy in the future or other assets? We never filed bankruptcy and we were proud of that fact. Seems, though, that maybe it would have been the better route, looking back on it. We went back to school, started new career, settled our debts and rebuilt our credit. We are attempting to get a home loan now and all looks great, until the underwriters come across our old 2nd mortgage, listed as a "past due" amount on our credit report of $66,000. Should it read "past due" or "foreclosed"? Is this "Past Due" really a threat? Please advise.
Hi jmombo,
As 4 years have already passed since the foreclosure, I don't think the second lenders may once again come after your new property in order to recover their debts. If they wanted to recover the debts, they could have sold off the account to a collection agency who could have recovered the money from you.
The past due status can be problematic. You can contact them and ask them to update the status as foreclosed. But it will be their discretion whether or not they will do so.
As 4 years have already passed since the foreclosure, I don't think the second lenders may once again come after your new property in order to recover their debts. If they wanted to recover the debts, they could have sold off the account to a collection agency who could have recovered the money from you.
The past due status can be problematic. You can contact them and ask them to update the status as foreclosed. But it will be their discretion whether or not they will do so.
Hi jmombo!
Welcome to forums!
Since it is more than 4 years that the property was foreclosed, I don't think the second lender will come after you any more. Moreover, if they had to recover the debts, they could have charged off the account and asked a collection agency to recover the debts. But they have not done so. Thus, I feel chances are less that they will come after you any more to recover the debts.
Feel free to ask if you've further queries.
Sussane
Welcome to forums!
Since it is more than 4 years that the property was foreclosed, I don't think the second lender will come after you any more. Moreover, if they had to recover the debts, they could have charged off the account and asked a collection agency to recover the debts. But they have not done so. Thus, I feel chances are less that they will come after you any more to recover the debts.
Feel free to ask if you've further queries.
Sussane
The credit report should read settled or foreclosed on the 2nd, in order for an underwriter to move forward with a new loan. Right now it is appearing a rolling late because it was never settled or foreclosed, and you cannot get a mortgage with a late on any mortgage in the past year.