Buying A Home
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Buying a house after bankruptcy

Hi nesters,

I have not been here in quite a while. I have been divorced now for 6 years, and needless to say, my name is still on the mortgage with my ex. He cannot income or credit qualify to remove my name. He is suggesting that we short sale. I have been told a short sale is basically a foreclosure. I am contemplating a bankruptcy, but want to be sure after some time I will be able to purchase a home and eventually another car.

Has anyone filed bankruptcy, then bought a house?

Re: Buying a house after bankruptcy

  • A short sale will affect you way less than a foreclosure or bankruptcy.  I know of people who did short sales and were able to buy a new home in 3 years.  Foreclosures and BK will take longer than that, but some of it depends on how quickly you rebuild your credit.  

    For example, my cousin filed with her ex like 5 years ago.  Since then, she hasn't pulled out ANY new credit at all.  Her car is in her dad's name, she has no credit cards, she owns her home (she kept that through the BK because it was underwater at the time).  So she wouldn't be a great candidate to buy even when 7 years is up simply because she has no new post-BK credit history.  But if you do some things to rebuild your credit starting pretty soon after your BK, you may have better chances of buying.

    Your best bet would be to talk to a mortgage broker to talk about what your options are, and how they will affect you, because they will know how long things will take in your specific situation.
  • Also, when you talk about short sale, I assume your home is underwater, correct... meaning you owe more on it than it's worth?
  • For credit purposes, I am guessing that a short sale would not be nearly as bad as a foreclosure.  A short sale happens when the house is underwater.  No payments get missed (assuming), but now the mortgager is being "shorted" the difference between the sale price and what is remaining on the loan.  It will still be a big negative mark on your and your ex's credit.

    However, a house is foreclosed upon when payments have been missed for months or even years.  Then the house is sold...usually for even less than a short sale...and the mortgager is still shorted the difference.  Except now the difference is bigger.  That is a lot of serious, serious bad stuff on the credit report.  Especially the months of missed payments.  I'd think it would be tough to get a home loan for many years in this situation...but maybe not necessarily many years for a short sale, which is one bad mark vs. many bad marks.

    I've heard of people buying houses/cars after a bankruptcy.  It will vary by bank, but I think the soonest required is a minimum of one year after the bankruptcy.  Though I'm sure most require much longer.  Oddly enough, in a way, a bankruptcy is positive for a lender because (I think) it's 15 years before a person could file for one again.  So that takes away a bit of risk for them.

    If I were you, I'd meet with a few loan officers from different banks and find out what their policies are.  And/or if you see an attorney to discuss your bankruptcy, he/she could give you advice on that also. 

  • Hi Julianne, No, we don't owe more than it's worth. My ex just can't qualify credit wise. I have been told by a bankruptcy attorney that I will be able to purchase a home after rebuilding my credit and 1-2 years. I just want to make sure that's correct info.
  • Hi Julianne, No, we don't owe more than it's worth. My ex just can't qualify credit wise. I have been told by a bankruptcy attorney that I will be able to purchase a home after rebuilding my credit and 1-2 years. I just want to make sure that's correct info.
    Am I missing something?  Why wouldn't you just sell the house and just be done with it?  Why the need for BK or a short sale?
    image
    short+sassy
  • My ex is being vindictive. He is refusing to do anything, including talking to me about options. I've even offered to take the home myself, after 6 years of divorce. He pays the mortgage on time, but the only option to remove my name through our mortgage company is refinance or loan assumption. Both he has to credit qualify, and he cannot. I am now seeking options on my own to severe ties since he's refusing to act on this.
  • Short sales are only relevant when you owe more than your house is worth.  If you don't owe more than it's worth, then it's just a regular sale... 

    You can both simply sell the house together- it's not a short sale though.  Or if he wants to retain the house, you can simply have a lawyer remove your name.  You would sell him the house for something like a dollar.  This is very standard procedure.  

    You need to call a lawyer and educate yourself.  It sounds like you are allowing your ex to give you the run around.
    short+sassy
  • I'll give your ex a little bit of the benefit of the doubt and assume he just doesn't know what a short sale is.

    If he wants to sell the house, great!, you all should sell the house.  As long as it sells for more than the value of the remaining loan, it will not be a short sale and have no negative effect on your credit.

    In fact, depending on what your divorce decree says, if there is a profit you might be entitled to half of it.

    MommyLiberty5013
  • Correct, like others have said, a short sale is only if you're underwater on the house... meaning you owe, say, $300,000, but the house is only worth $250,000.  It has nothing to do with who is on title or anything like that.  

    Unfortunately, the only way to remove you from the loan is for both of you to either agree to sell the house, or he has to refinance to put it into his name only.  The latter does not sound like an option, and it sounds like he refuses to do the former.  This now becomes a legal issue.  The house and what to do with it should have been included in your divorce decree....why wasn't it?
  • Julianne, It was included in the decree. I have taken him to court for contempt will be twice here soon. The judge has said that he will be responsible for whatever is owed should the house be sold in auction. Which is great, but Wells Fargo has stated that they will come after both of us. I filed the Second Motion for Contempt today.
  • If your ex can pay the mortgage on the home, what about doing a quit claim deed? Basically, it's a way to legally quit being on the deed. This would remove any rights to any potential profit on any sale on it in the future. IF Wells Fargo also approves it, then you could get your name off of the mortgage loan too.

    Only do the quit claim deed IF WF allows you to come off the mortgage, though.

    What about discussing all this with a real estate attorney? I don't know enough about this sort of stuff, but if a real estate attorney isn't the correct person to help you, they could probably refer  you to someone who can.

  • Is it your divorce attorney that's doing the two contempt of court filings? If so, and it's still not pushing the courts to act, is it possible you need a more aggressive attorney?


  • julieanne912julieanne912
    Fifth Anniversary 500 Love Its 500 Comments Name Dropper
    member
    edited February 2016
    Unfortunately if your ex-husband doesn't sell or refinance the house, even if it's through a court order, it can still go into foreclosure if he stops paying on it, and you don't pay on it either.  That would be really silly to let happen though, because you would both lose out on any profit gained if you sold it.  

    Also, a quitclaim deed to take her off title is useless to her unless she's also being taken off the loan.  Her being on the loan is what the real issue is here, not her actual ownership of the house.  And, the only way she can get off the loan, is for the house to be sold, or for him to refinance, which it sounds like he cannot qualify for on his own without her income/credit.  

    Anyway, I'm sorry your ex is being so difficult, it really is childish how he's acting... sounds like he's not even worried about the money but more doesn't want you to get your way.
  • I am acting pro se. I am a paralegal and have worked in legal/law for years. Wells Fargo are applying their own limitations and restrictions. He is eligible to do the HARP with other banks, but face a higher interest rate. I want the judge to force him to do so, bc that is not my concern. He has had 6 years to fix his credit and worry about a rate. He will keep the same rate and terms if he repair some things on his credit through WF. However, I'm concerned that this will continue to be a contempt thing with him.
  • I'm guessing this divorce wasn't a mutual decision.  Sounds like he's using this to get back at you because it's the only way he can.
    Daisypath Anniversary tickers
  • I pulled the plug after years of physical, emotional, and mental abuse. So, no. But I have said the same, which is why I just want to file bankruptcy and be done.
  • Just seems like filing bankruptcy won't hurt him at all... but it sure will hurt you.  Can't the courts order him to sell the house?  Like you said, it's not your problem he can't refinance at the terms he wants... he needs to just sell the house and move on.
  • Also I'm not sure completely on this, but if you file BK, they may force you to sell the house anyway, since it is an asset.... and then you'd be back in the boat you're in now.
  • Julianne, Yes, the court can order him to sell the house, just as they have already ordered him to be solely liable for any money owed should the house be sold in auction. Wells Fargo has stated that once they receive whatever documents they get from the court regarding the auction, they will seek that money from both of us. I do not want to be liable for any amount of money when he was ordered to sell or refinance 6 years ago, when he could. I'm aware that bk will hurt me, but I'd rather start the hurt now, than be liable for a house I don't live in.
  • Julianne, Yes, the court can order him to sell the house, just as they have already ordered him to be solely liable for any money owed should the house be sold in auction. Wells Fargo has stated that once they receive whatever documents they get from the court regarding the auction, they will seek that money from both of us. I do not want to be liable for any amount of money when he was ordered to sell or refinance 6 years ago, when he could. I'm aware that bk will hurt me, but I'd rather start the hurt now, than be liable for a house I don't live in.

    This is not legal advice, as I'm not authorized to give it, but I'm going to have to agree with OP. If I were in her shoes, I would file for bankruptcy, too. (Fellow paralegal, here). Our society puts too much of a nasty stigma on filing for bankruptcy like its an awful thing, when in reality, it should be looked at as a new start. No, it's not pleasant, but the ends justify the means.  I'm not saying OP should make a habit of bad habits, (meaning filing more than once and continuing to be irresponsible). Perhaps OP wasn't the one who was irresponsible, to begin with. If anyone has gone through one, you know they expensive.  But, this should be more or less a learning experience and a fresh start.        


  • Emily and OP's, Thank you very much for your advice. I really appreciate it. I filed chapter 7 today. My attorney further advised me to proceed with the court date for Motion for Contempt to have the judge sell in auction, that way WF cannot come after me, but the house will get sold and he be liable for the debt. That is precisely what I am going to do. I will keep you posted on the court hearing.
    short+sassy
  • I was just watching a Judge Judy where a woman was suing her father's previous tenant after the house had been sold.

    It came out in the episode that the house had been part of a divorce between her father/mother, but he was allowed to stay living there and they would split the proceeds whenever the house was sold in the future.  And, for a number of years he did live there and paid the mortgage.  But then he moved and rented the house out...but didn't give any of the rent money to his ex-wife.

    She tried to get him to sell the house, but he wouldn't.  So she took him court and was than able to sell the house with the "court's signature"...so to speak...in place of his.  She still had to divide the proceeds, of course, but I found it interesting a court could step in and allow her to sell the house without his agreeing to it.  

  • @short+sassy Wow, that's interesting. This has been going on too long. The court can only enforce so much. I would have been in the position of continuing to take him to court, before the judge decided to sell in auction. I eas not aware, until have a long, detailed conversation with WF about what it would take for him to Assume the Loan. He has to credit and income qualify. So, even if he fixed the credit issues, like they suggested, he still might not income qualify. Just a endless cycle I decided to stop, today. I will be able to buy my own home within two years.
  • @short+sassy Wow, that's interesting. This has been going on too long. The court can only enforce so much. I would have been in the position of continuing to take him to court, before the judge decided to sell in auction. I eas not aware, until have a long, detailed conversation with WF about what it would take for him to Assume the Loan. He has to credit and income qualify. So, even if he fixed the credit issues, like they suggested, he still might not income qualify. Just a endless cycle I decided to stop, today. I will be able to buy my own home within two years.

    It's a shame it has to come to that since it sounds like the best option for both of you is to just sell the house.

    But good luck and good riddance to him!

  • @short+sassy I have asked him to sell or give me the house several times. He stated that he'd rather burn it down. Thus, another reason I decided to file bk and severe ties with him completely. OAN: He texted me last night to call me a foul name. I asked him why is he upset. Further proves to me that he wanted to take me down with him at some point.
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