What to do if my Chapter 7 has been discharged but my home has still not been foreclosed on?

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What to do if my Chapter 7 has been discharged but my home has still not been foreclosed on?

I am 1 year out from my Chapter 7 and on my way to rebuilding my credit score (it’s 644 now). I want to purchase a home although I am still in my house. My mortgagee has not done anything yet and if they don’t get foreclosure started soon, I am going to be waiting much longer before I can get another mortgage. It’s a Catch 22. I am banking cash, but the longer this goes on, the further out my repaired credit and ability to get a mortgage goes.

Asked on June 4, 2011 under Real Estate Law, Connecticut

Answers:

M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

With everything going on these days and so many bankruptcies and foreclosures it is taking banks a long time to catch up on the matters at hand.  Foreclosures are a long and expensive process for banks.  I am wondering if you can not contact the bank and see if signing  a deed in lieu of foreclosure as a possibility.  This is a deed that allows the bank to regain ownership without having to go through the long and expensive legal process of formal foreclosure.  I am assuming that the deficiency, if any (the amount left on the mortgage after the house sells for market value) was discharged.  Otherwise, you will have a deficiency judgement against you. Go and get some legal advice here.  Good luck.


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