Five years af­ter bankruptcy, lender ky­boshes bor­rower’s home pur­chase

Sun Sentinel Broward Edition - Homespot - Broward East - - CAMPBELL&ROSEMURGY - By Ilyce Glink and Sa­muel J. Tamkin

Tri­bune Con­tent Agency Q:

I filed bankruptcy in 2008. In Novem­ber 2013, while in the process of pur­chas­ing a new home, I was in­formed that be­cause there was no of­fi­cial fore­clo­sure on the home in 2008, I can­not pur­chase an­other home for three years.

Ap­par­ently, the lender did not re­move the home from my name af­ter the bankruptcy. As it hap­pens, I had ac­tu­ally filed Chap­ter 13 in 2005 and had it changed to Chap­ter 7 in 2008.

Do I have any op­tions at this time? The house we would like to pur­chase is still on the mar­ket, and we need help. This is the only is­sue that came up with the loan. We ac­tu­ally had clos­ing date set for Nov. 25, and this came up Nov. 21 Any help would be deeply ap­pre­ci­ated. A:

It’s un­for­tu­nate that you didn’t check your credit his­tory af­ter bankruptcy to make sure that the loan had been dis­charged or to see any mat­ters re­lat­ing to your bankruptcy that af­fected your credit his­tory. That would have been an early in­di­ca­tion that you needed to tie up some loose ends.

It would seem that the dis­charge should have ef­fec­tively re­moved you as owner on the property and for re­spon­si­bil­ity for the loan. How­ever, even though you no longer owed the debt, you con­tin­ued to own the home un­til ti­tle to the home trans­ferred to your prior lender, was sold in a short sale, or was given to your lender in a deed-in­lieu of fore­clo­sure. Sure, you no longer owed the debt on the home, but you still owned that home.

If you owned the home dur­ing the bankruptcy and the lender did not move to fore­close on the home, the lender seems only re­cently to have fore­closed and ob­tained ti­tle to the home. For pur­poses of your credit his­tory, the fore­clo­sure or other process the lender went through to get ti­tle to the home seems to have oc­curred more re­cently than the date of your Chap­ter 7 bankruptcy. Many lenders start the clock run­ning from the date they ob­tain ti­tle to a home via fore­clo­sure or other­wise to then give you the op­por­tu­nity to buy a sub­se­quent property.

If the lender ac­tu­ally has failed to com­ply with the bankruptcy court process or has un­der­taken other ac­tions that do not com­ply with the stan­dards that the bank should have met, we can sug­gest a cou­ple of ac­tions, though none of them will re­solve this overnight. First, if the lender is reg­u­lated by the OCC, as big na­tional banks are, you can go to Help­With­My­Bank.gov and file a com­plaint. Ask the OCC to in­ter­vene to straighten out the pa­per­work with the bank. You can also file a com­plaint with the Con­sumer Fi­nance Pro­tec­tion Bureau (CFPB.gov) and ask for its help as well. If the lender is a state bank, you can go to the state agency that reg­u­lates lenders and ask the om­buds­man to as­sist you in con­nect­ing with the lender to straighten out the pa­per­work.

You might also try to use the le­gal sys­tem against the lender. Con­sider ei­ther hir­ing an at­tor­ney to file a law­suit against the lender or sue on your own in small claims court. Just fil­ing a law­suit might have the de­sired ef­fect of get­ting the lender’s at­ten­tion, at which point you might be able to straighten out the prob­lem quickly.

Hope­fully, one of these ideas will work and you’ll be able to buy a home sooner rather than later -but it may take more than a few weeks to get it done. Good luck.

(Ilyce Glink is the cre­ator of an 18-part we­bi­nar and ebook se­ries called “The In­ten­tional In­vestor: How to be wildly suc­cess­ful in real es­tate,” as well as the au­thor of many books on real es­tate. She also hosts the “Real Es­tate Minute,” on her YouTube.com/ ex­pertrealestatetips chan­nel. If you have ques­tions, you can call her ra­dio show toll-free (800-972-8255) any Sun­day, from 11a-1p EST. Con­tact Ilyce and Sam through her web­site, www.thinkglink.com.)

(c) 2014 Ilyce R. Glink and Sa­muel J. Tamkin. Dis­trib­uted by Tri­bune Con­tent Agency, LLC.

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