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Sep 2015

Maria’s credit score after bankruptcy is 640

Posted by / in After Bankruptcy /

In just thirteen months, Maria’s credit score after bankruptcy was above the national average

Are you one of the people who still thinks bankruptcy hurts your credit score?  

Maria M was worried about her credit score when she came to talk to me in November 2013.  That’s part of the reason she put off filing bankruptcy until spring 2014. But a second mortgage on a foreclosed home was suing her for over $50,000.  She knew she had no choice.

Fast forward to August 2015. Maria brings in a family member who has also been putting off filing bankruptcy.  And Maria tells me her credit score is back up to 640.  She was so happy that her credit score after bankruptcy was moving up so fast.


Your credit score after bankruptcy

Your credit score after bankruptcy is your road to a better life. A 640 score can be good enough to get an FHA mortgage.

Now 640 is not a great score. But it can be good enough. Although 640 above the 630 national average of scores, it just gets you out of the bottom third of people. (Some people have really, really bad scores.) 

That 640 score is the threshold for getting approval on an FHA mortgage loan.  And 640 can get you a car loan at close to 10% interest-especially if you shop very carefully.  

I urge people, if as all possible, to wait three years after bankruptcy to finance a car. (In three years, your credit score after bankruptcy can be well above 700.) But for people who have been dragging bad credit around for years, people who’ve been paying upwards of 20%, a car loan at 11% or 12% would look mighty good. 

Let me put it another way.  One third of the country have credit scores below 640.  Charge offs, collections, repossessions!  Nearly everybody in that group would see their scores improve if they filed bankruptcy–but most of them wait until they get court papers, or even until they get garnished.  

Bankruptcy is in the law to help you–and to help the country. The country is better off if you can fix your credit.  The country is better off if you can get a car loan at a payment you can afford.  The country is better off if you can save up and buy a house.

What does a low credit score mean?  A low credit score means the lenders know you need to file bankruptcy.  And that you are going to, sooner or later.  The only person who doesn’t know it, is you.

Why wait? 

Your credit score after bankruptcy is your road to a better life.  





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Aug 2014

How Soon After Bankruptcy Can I Get a Mortgage?

Posted by / in After Bankruptcy, Blog / 4 comments

Good News:  Fannie Mae Announces New Shorter Waiting Period for After Bankruptcy Mortgage.

Here’s the most important question for people who file bankruptcy because they can’t make their house payments:  How soon can I buy a house again?

Since the housing crisis, there have been two waiting periods:  Two years after the bankruptcy; but three years after the house is foreclosed.  (As long as “extenuating circumstances” led to the bankruptcy.  With no “extenuating circumstances,” the rule is and was seven years.  That’s the penalty for “strategic default.“)

That three years after the foreclosure was a big stumbling block to a lot of people.   Often the house did not foreclose for a year or more after the bankruptcy was discharged.  (That’s why I tell people, don’t move out!)   So that three year waiting period turned into four or five years.

Bette Moose mortgage lender

Bette Moody, with Primary Residential Mortgage, checked behind me to make sure I read the new after bankruptcy mortgage policy right

On July 29, 2014, Fannie Mae announced a new policy.  From now on, the two year after bankruptcy mortgage rule applies.  But if you discharge the mortgage debt in your bankruptcy, you do NOT have to wait three years after the actual foreclosure.

This means hundred of people I know, and tens of thousands nationally, can buy a house again a year or two sooner.  That’s fair to them, and good for the country too.  It’s fair, because it’s not the homeowners’ fault that the mortgage companies don’t get around to foreclosing.  And good for the country, because more houses will be built and sold.


At least some lenders think this rule only applies if you list your house in your bankruptcy as surrender.  Those lenders say, if you listed it as keep–and then change your mind–the three year rule still applies.

PS  I want to thank John “the Ionizer Guy”-one of my blog readers.  John was the first person who pointed out this new after bankruptcy mortgage rule to me.  (Google says a thousand people a day read one of my blogs.)

And also Bette Moody.  Bette is a branch manager for Primary Residential Mortgage.  She checked behind me, to make sure I had this right.



PPS  A month after I first posted this, the Washington Post ran a good summary, The New Federal Guidlines–The Washington Post

PPPS  A friend, who filed bankruptcy with someone else, told me she got an after bankruptcy mortgage approved by George Mason Mortgage, while still living in the old house, included in her bankruptcy, that had never been foreclosed.

PPPPS–December 2015.  Heard today from Jake and Donna.  They filed Chapter 7 bankruptcy with me in the Summer of 2011.  Afterwards they tried to work out a loan mod with Bank of America.

Spring 2012, they gave up on trying to talk to Bank of America and moved out.  Please foreclose, they told the bank.  The house sat vacant for three and a half years.

While the house was vacant, and Bank of America doing nothing about it, Jake and Donna, got on with their lives.  They rented for two years; then this summer they bought a new house.  Just over two years after they moved out of the house that was discharged in their bankruptcy.

Jake contacted me, just to let me know Bank of America is finally foreclosing on the old house, January 8, 2016.  


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Mar 2014

Can I get a mortgage after filing bankruptcy?

Posted by / in After Bankruptcy / 8 comments

Can I get a mortgage after filing bankruptcy?

Every week I assure five or six nervous couples that, yes, it is possible to buy a house and get a mortgage after filing bankruptcy. Current government regs say you can qualify for a mortgage and buy a house two years after a chapter 7 discharge.

Some people, just don’t believe that.  “If we’d known that,” they tell me, we’d should have filed bankruptcy when we first got into trouble.”  Right!

(Obviously just being two years after bankruptcy by itself doesn’t qualify you.  You need to have carefully rebuilt your credit.  And you need to be making enough money.) Just want to let you know, I’m not making this up.

I should mention one person who talked to me about wanting to lend to people after bankruptcy.  Her name is Bette Moose, and she works for Primary Residential Mortgage, which has an office in Fredericksburg.  Her contact is [email protected]  If your are in the market for a mortgage, especially with somewhat damaged credit, a like bankruptcy, it’s important that you shop.  The first offer that you get might not be your best one, so you should get two. So apply at your own bank, too.

P.S.   A client told me here in April 2014 that he got an after-bankruptcy refinance from Quicken Loans, after a couple local mortgage brokers, and then Bank of America, both told him it was impossible.    So I’m passing along Quicken Loans as another recommendation.

Betty Moose

Bette Moose, with Primary Residential Mortgage

PPS.  Quicken Loans has started sending me copies of letters to some of my after-bankruptcy clients, offering to refinance their mortgages. Quicken Loans

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Jan 2014

Don’t reaffirm your car loan with Apple FCU

Posted by / in After Bankruptcy, Weekly Posts / 2 comments

Here’s what happened when Jennifer reaffirmed her car loan with Apple Federal Credit Union.

Jennifer filed bankruptcy with another bankruptcy lawyer here in Northern Virginia.  She had a car loan with Apple Federal Credit Union, and she wanted to keep the car.  So she reaffirmed the car loan.

When you “reaffirm” a loan you take it out of the bankruptcy.  Later on, if you can’t pay, they can repossess the car, sue you, and garnish you.  Under the 2005 Bankruptcy Reform, if you don’t reaffirm your car loan, they can repossess your car–even if you are current.  (Although the law allows it, very few lenders do repossess cars that are current–Ford Motor Credit does, at least here in Virginia.  And I’ve seen it from Suncoast Credit Union in Florida, and Alaska Credit Union, from Alaska.)

Jennifer paid off her loan, and asked Apple to send her the title.  Apple FCU refused.

Apple said she could NOT get her car title unless she paid her Apple FCU credit card, too.   What?!  The credit card was wiped out in the bankruptcy.  Well, yes and no.

Virginia bankruptcy lawyer Robert Weed fighting Apple FCU

What Apple FCU did to Jennifer stinks. I’m fighting for her, even though I wasn’t the lawyer who did her bankruptcy. I’m known as a fighter.

The credit union can’t ask Jennifer directly to pay the credit card–that WOULD violate the bankruptcy law.  But “security interests” pass through bankruptcy.  A security interest is the right to repossess your car, or foreclose on your house, if you don’t make your payments.  After bankrutpcy that’s still true.  You still have to pay your mortgage and pay your car.

Credit Unions get you to sign in small print that your credit card counts as part of your car loan.  (I’m sure banks would do that too, unless some regulation told them they can’t.  I don’t know where that regulation is, however.)  The credit card balance, under the small print, is also secured by the car.   Actually, I just down-loaded the Apple FCU credit card agreement and it says that collateral securing other loans with the credit union “may” also secure this loan.  That’s a pretty weak warning.

That brings us to the reaffirmation.  Jennifer thought when she reaffirmed and then paid off the car loan, that she would have a paid for car.  The reaffirmation agreement showed the payments she had to make, and that the collateral was the car.  Shouldn’t that means when she made all the payments the car was paid off?

Jennifer thought so.  This column at bankrate.com thinks so.  I used to think so, too.

But I have to admit that Apple FCU has a point.  The required reaffirmation agreement, which is written in law at 11 USC 524(k)-(m) , doesn’t exactly say that.  It doesn’t say anything about what happens to the collateral.

The required reaffirmation agreement includes all kinds of warnings:  this is serious, you don’t have to do it, here’s what your payments will be; here’s the interest rate: here’s the collateral.  But it doesn’t say, when you get to the end, whether the car is actually paid for.

Admitting that this is a gray area, I still decided to fight for Jennifer.  I’m quick to fight for my own clients.  (I think that’s a lawyer’s job.  I explain what I do here.)  But I also fight to protect the frontiers of the law. ( Jennifer brought her problem to me because she heard I was a fighter.)

I want to know what the judge thinks about what Apple FCU did here.  Certainly it stinks.  And I also want to know if the judge thinks Apple’s credit card agreement really creates an enforceable security agreement.  It looks pretty vague to me.

I think Apple FCU is a decent outfit.  Before this, I’ve never seen them do anything underhanded.  (You can read in my blog about other banks and credit unions that I do NOT like.)   We often recommend them to clients who are looking for a credit union.  I have some hope they’ll decide they don’t want a fight on this issue.

If Apple decides to fight this out, I’ll let you know what the judge says.

  • February 17, 2014, pm28 6:42 PM

    Good news.

    Apple agreed we were right and they were wrong. We CONTINUE to have Apple FCU on our list of financial institutions we think treat people fairly.

  • Robert Weed

    Robert Weed

    April 22, 2014, pm30 2:54 PM

    Around Northern Virginia, we see a lot of people who bank with Congressional Federal Credit Union. When they asked for a reaffirmation, we asked what stand they took on whether the reaf nullified any claim for cross-collateralization. We asked for them to put it in writing and they did. Here’s an expert from their email. .https://robertweed.com/wp-content/uploads/2014/04/Congressional-FCU-Reaffs-Nullify-Cross-Collateral.pdf


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Oct 2013

National Lien Processors 561-409-5490 Collecting after Bankruptcy

Posted by / in After Bankruptcy, Weekly Posts / No comments yet

National Lien Processors called “Bill” yesterday.  Bill filed bankruptcy with me and was discharged in June 2013. Bill told them he filed bankruptcy, and National Lien Processors told him that bankruptcy did not apply to them. That of course is B.S. and they know it.  They told Bill his lawyer better be ready to defend him.  That was B.S. too. Lori, one of my top bankruptcy paralegals, called National Lien Processors at the number they left, 561-409-5490.  They hung up on her.  That’s what you get from scam outfits who know they are violating the Fair Debt Collection Practices Act and don’t care.

The bankruptcy judge will fine legitimate outfits that step over the line with after-bankruptcy harassment. But he can’t do much with underground companies that know they are illegal and don’t care. That’s a job for Federal law enforcement.

Debt collection scams threaten to take legal action against people like Bill, but they are not going anywhere near a courthouse–because they are the people who are illegal. Besides just hanging up, there is one thing you can do.  The Dodd-Frank law  in 2010 set up a Consumer Financial Protection Bureau, with a budget they get from the Federal Reserve.  That means they have some money, a little, to actually investigate illegal scammers. Here’s the link where you can complain, if National Lien Processors, or somebody like them, calls you and makes illegal threats. When legitimate outfits step over the line and harass my clients after bankruptcy, I sue them in the bankruptcy court.  But the bankruptcy judge can’t do much with underground companies who know they are illegal and don’t care.  That’s a job for Federal law enforcement.


PS  Bill did file a complaint today with the CFPB…if they update him, I’ll update this blog.

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Sep 2013

Can filing bankruptcy can make you smarter?

Posted by / in After Bankruptcy, Weekly Posts / No comments yet

Can filing bankruptcy make you smarter?

A new book, Scarcity: Why Having Too Little Means So Much, explains why filing bankruptcy can make you smarter about money.

The book authors, Harvard Professor Sendhil Mullainatha and Princeton Professor Eldar Shafir, don’t talk about filing bankruptcy.  What they do talk about is how smart people get stupid, when things are tight.  When people are rushed, we make bad decisions about time; when people can’t pay their bills, we make bad decisions about money.

When the situation seems impossible, we choke up.

When people come to talk to me about bankruptcy, it’s usually because their debt situation is impossible.  And for a lot of them, it’s been impossible for a long time.  Being an an impossible financial situation–scarcity–often means people make one financial mistake after another.

Research by Prof. Eldar Shafir shows why people should be smarter about money after filing bankruptcy.

Research by Prof. Eldar Shafir shows why people should be smarter about money after filing bankruptcy.

For most people, filing bankruptcy is a smart decision.  And, according to the research in this book, it should make people smarter about money decisions from then on.

That’s what I see.  After bankruptcy, people often do really well.  Not just because “they learned their lesson”–although that’s a common perception.   More importantly, once the pressure is over, people’s good sense kicks back in.

Here’s a quick review of the authors’ findings.

Filing bankruptcy helps you sleep, too.

One other thing jumped out at me when I read about this research.  Being in a tight spot financially can knock 13 points off your IQ, they said–“the equivalent of one night’s sleep.”

Wow–that’s another reason filing bankruptcy makes people smarter.  After filing bankruptcy, people sleep better.  That’s NOT from Professor Mullainatha and Professor Shafir.  That’s from a study I did, with Survey Monkey, of people three years after bankruptcy.  Eighty-eight percent of the people said they sleep better after bankruptcy.  You can read about that here.   Getting enough sleep makes your smarter, too.




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Sep 2013

“Transferred, Sold” accounts on your after bankruptcy credit report

Posted by / in After Bankruptcy / 7 comments

“Transferred, Sold” accounts from Chase are a common error on after bankruptcy credit reports.

When a bank sends your credit card account to a debt collector before your bankruptcy is filed, your after bankruptcy credit report often does NOT show the bankruptcy discharge on that “transferred, sold” account.

Instead, they usually show “transferred, sold” account with “charge off.”   That means the credit score, future lender, or security clearance officer will look and think the debt is still out there somewhere.  (I explain what “charge off” means here.)

That’s most often true if you had that credit card account with Chase.  At least that’s what I see, when we look at my clients’ after bankruptcy credit report.

Chase usually reports "transferred, sold" accounts as charge off, not bankruptcy

Chase very rarely updates your after-bankruptcy credit report to show your bankruptcy discharge. They usually report “charge off” and “transferred, sold” account.

Over the last ten years, the accuracy of after bankruptcy credit reports is much better.  These “transferred, sold” accounts with “charge off” are the least improved problem.   Chase is the least improved bank.  (Equifax is the least improved credit bureau.)

Chase can try to argue that once an account is transferred or sold, it’s not Chase’s responsibility to update to show the bankruptcy.   I say that argument is BS.

The law is pretty clear.  When Chase gets a dispute from the credit bureau, §611(2)(2), they have to take action.  (Under the law, complaining straight to Chase is not the best way to go.)

They have to “conduct an investigation.” Investigation is a powerful word.  It means more than just looking in their own computer.  The Fourth Circuit–the big judges just below the Supreme Court–say that means a “searching inquiry.” 

If the investigation shows the information is “incomplete or inaccurate,” they have to report what they found out to all three credit bureaus.

They claim their “transfer, sold” account with “charge off” is accurate.  But there’s no way it’s “complete.”

The bankruptcy is the end of the line for that account.  Without saying bankruptcy, the information is not complete.  How hard is that?

But there’s more.  If the information “cannot be verified” they are required by the law to modify or delete the account.  So, if they say,  ‘we don’t know what happened in that bankruptcy,’ then they have to delete the account.

There’s only one way Chase can legally keep reporting the charge off, “transferred, sold” account without the bankruptcy.  That’s  if they know there was no bankruptcy.  If their investigation finds the  bankrutpcy, they’ve got to do a correction.  And if they don’t know how to look for bankruptcy records–look at the credit report for one thing!–they have to delete it.

All that’s in the law.

Recently, the Consumer Finance Protection Bureau has helped out a little more.

The Dodd-Frank financial reform law in 2010, set up the Consumer Finance Protection Bureau and gave them authority to pass regulations under the Fair Credit Reporting Act.  They did that with Regulation V.  Regulation V, Appendix E, I(b)(4) says that credit card companies should “update the information…as necessary to reflect the current status of the consumers account.”    So, what about the “transferred, sold” account with charge off, but no bankruptcy.  Maybe, it’s accurate.  It’s certainly not complete.  And it’s positively not the “current status.”

I’m lining up cases from my bankruptcy clients to go after Chase before the end of the year.  I’m sick of Chase verifying “charge off” with no bankruptcy when my clients do a credit report dispute.  We’ll try to update their attitude.

Hi, It’s October 2014.  I finally have Chase in court on this.  Not wanting to make it a big deal, I sued them in Fairfax General District Court.  Chase apparently does want to make it a big deal–they were afraid the Virginia judges in Fairfax would not protect their rights, so they removed the case to the United States District Court in Alexandria, VA.  The case number there is 14-01326-JCC-IDD.  In Fairfax I asked for $1000 under the law for my client; and $1000 for two and a half hours for me.  In the US District Court, my hours will be a whole lot more.  I’ll let you know where this comes down.

Once they sold the account, Chase says they don’t have to report it any more.

What Chase says is:  Chase sold the debt in question before Plaintiff filed his bankruptcy petition,
                      which terminated any obligation of Chase to engage in any further credit reporting relating to the
Chase is right that they are not required to report anything.  But since they DID keep reporting, they were required to be complete.  They dodge that argument completely.

December 2014.  We were able to resolve our issue with Chase, in that case.  That’s all I’m able to say about that.

I’m also happy to report that my friend Charles Juntika  is hammering Chase and also GE Capital on this issue in the Southern District of New York.  The cases are Haynes v Chase  and Belton v GE Capital.

May 2015.  The New York Times reports that Chase and Bank of America agreed in these cases in New York to fix this “problem.”  The Bankruptcy Judge in New York had made it clear he thought they were doing it on purpose–because some people would end up paying.  (GE Capital agreed to settle some months sooner.)


PS   Why are after bankruptcy credit reports a lot more accurate than they were ten years ago?

There are three big reasons why after bankruptcy credit reports have gotten better.

First, some of the credit cards that were the biggest offenders are gone.  Fleet credit cards seemed to never correctly report debts as discharged in bankruptcy.  They were taken over by Bank of America.  First USA and Bank One both had the same problem.  So did Washington Mutual.  They were taken over by  Chase.

Second, there are a few dozen lawyers around the country who have been suing credit bureaus on this for the last ten years.  Besides me, that includes Jason Krumbein, in Richmond; Kathy Cruz, in Arkansas; James Manchee, in Texas; Charles Juntikka in New York City.

Third, the White Terri class action.  Charles Juntikka, a bankruptcy lawyer from New York, brought a national class action against the credit bureaus because their after bankruptcy credit reporting system was not reasonable.  They agreed to shape up, some.  Juntikka recently brought in David Boies, one of the best known lawyers in the country, to hammer them harder.  The credit bureaus are terrified of David Boies.

(Under the original wording of the FCRA  in 1971, the credit bureaus were supposed to see that your credit report was complete and accurate.  But they only had to change stuff you disputed that was “inaccurate.”  “Incomplete” seemed to be ok.  So they could argue with a straight face that NOT showing the bankruptcy was “historically accurate.”   That was changed back in 1996!  Since 1996 they have had to fix information that was “inaccurate  or incomplete or cannot be verified.”  Public Law 104 – 208 FCRA provisions in Appropriations Bill“)


PPS  Just to my clients

If you have not sent us your after bankruptcy credit reports, now would be a good time.  This blog explains how to start.  https://robertweed.com/2013/08/20/the-credit-report-you-need-is-the-credit-file-disclosure/

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Aug 2013

How soon after bankruptcy can I buy a house again?

Posted by / in After Bankruptcy / 101 comments

How soon after bankruptcy can I buy a house again?

Sooner than most people think.  And for some, it just got even better.

That’s because of a new policy from the Federal Housing Administration, announced by FHA Commissioner Carole Galante. Under that new policy, some people can get approved to get an FHA backed mortgage as soon as one year after the bankruptcy.  (Here’s that announcement, August 15, 2013, 13-26ml   Or here.)

Under the new FHA policy, how soon after bankruptcy can I buy a house again?

How soon after bankruptcy can I buy a house again?  Carole Galante just made it easier.

How soon after bankruptcy can I buy a house again? FHA Commissioner Carole Galante just made it just one year for some people.

It has to be one year after the bankruptcy discharge…and if you lost your previous house, it has to be one year after the shortsale, foreclosure or deed-in-lieu.  Whichever is last.  (So if you file bankruptcy in July 2013, discharged November 2013, but the mortgage company doesn’t get around to foreclosing until February 2014, your waiting period starts in February 2014, not November 2013.)

There are some other rules.  Here’s the big one.  Your bankruptcy–and your loss of your previous house–has to be because of a six month loss of income of at least 20%.  Job loss, major pay reduction, or maybe you lost of a lot of time from work for medical reasons, or something like that.

The FHA calls that an “economic event.” Before the crisis lot of people got slammed into mortgages they just couldn’t afford–that won’t get you the one year rule. That’s not an “economic event.”

Kids got too big for the old house–that won’t get you the one year rule, either.

What about marriage break up?  The way I read it, eligibility depends on household income.  If both spouses were on the old mortgage, and were working, and they split up, then the “household” income dropped.  The way I read it, that’s an “economic event” that gets you the one year waiting period.

What else do you have to do?  You need to show you had good credit before the “economic event.”  Before you had that job loss or paycut, or break-up, you needed to be pretty much current on everything.  If you were dragging around bad credit even before you took that paycut, you can’t get in that one year policy.

Finally, after bankruptcy, you need at least twelve months of paying everything on time.  That’s twelve months of good credit, or, the way I read it, having twelve months of no credit at all.  You just can’t have bad credit. (This makes your after bankruptcy credit report even more important.  I’m one of only a handful of bankruptcy lawyers who works with you to check your after bankruptcy credit report.  If somebody hits your credit after the bankruptcy, and disputes don’t fix it, I sue.  That problem is a lot less common then it was ten years ago, when I started suing.  But it still happens.)

And you also have to be counselled by a housing counselor.  Springboard seems to have a useful site, here.

What if you don’t have that “economic event”–the loss of 20% or more of your income.  You still have the same question.  How soon after bankruptcy can I buy a house.  That rule is two years after the bankruptcy discharge, two years after s shortsale or deed in lieu, three years after a foreclosure.  That’s found in the FannieMae Selling Guide, look at page 486.  Those rules are if there are “extenuating circumstances.”  “Extenuating circumstances” don’t have to be as specific as the 20% loss of income that counts as an “economic event.”  But there has to be some actual hardship–not just a strategic default.  If you just decided to not pay, the rule is seven years.

On July 29, 2014, Fannie Mae cancelled the three year after foreclosure rule for people who file bankruptcy.  Their announcement is here.  

You have to get two years past the bankruptcy, but you do NOT have to wait until three years after they actually foreclose.   But while you don’t have to wait three years, people trying to buy a house tell me they still get turned down if the house is still sitting there without a foreclosure.  That’s one reason I tell people, don’t move out.  

UPDATE:  The one year rule isn’t working very well.

An October 22, 2014 article in the New York Times reports only 337 people nationally were approved in the first year of the program.  Bank of America, Wells Fargo and Chase all said they would NOT help people under the one-year program.


UPDATE  TWO:  January 2015

Safa Javid

Safa Javid at Movement Mortgage is able to help some people get FHA Back to Work mortgage loans as little as one year after your house was foreclosed–if you can documents both a severe reduction in income and then a strong income recovery.

A mortgage company in Annandale told me that they make these loans.  They are called FHA Back to Work Loans.

They want very strict paperwork, both on the hardship and on the new current income. But if you meet the requirements, you can get approved.

The contact is Safa Javid, at Movement Mortgage. His contact info is here.  

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Aug 2013

The Credit Report You Need is the “Credit File Disclosure.”

Posted by / in After Bankruptcy /

What’s a credit report?  Where do they came from?  What’s a “credit file disclosure?”

After bankruptcy, you want to make sure your credit reports will be right. You want to make sure your discharged debts are showing discharged in bankruptcy; and it doesn’t look like some are still out there.  Having a bankruptcy on your credit report is bad for your credit. (You can build back to good credit in three years.)  Having bad debts on your credit report is worse than having a bankruptcy.  Having bankruptcy and also having bad debts–you really don’t want that.

There are dozens, maybe hundreds, of outfits that sell credit reports.  It’s impossible to keep track of everybody who can or might do a credit report on you.

Equifax is one of the three places to get your credit file disclosure

Dozens of outfits do credit reports. Only three keep a permanent file on you. Equifax, Experian, and TransUnion.  You have a right to see what’s in your file, by going to annualcreditreport.com

But there are only three companies that keep a permanent file on you.   Those three are Equifax, Experian and TransUnion. Everybody else, when they do a credit report on you, gets your credit file from Equifax or Experian or Transunion or all of them.

If you want your credit reports, after bankruptcy, to be right, we need to be sure that your “credit files” are right.  We want to be sure that when a landlord, car finance company, mortgage lenders or whoever looks at your credit report, they see that your  debts were discharged in your bankruptcy.

To do that, we need to see what’s in your credit files.  Equifax, Experian and TransUnion are the people who keep a credit file on you.  The big banks, car loan companies, and most creditors report your credit to Equifax, Experian, and TransUnion every month. (Some smaller companies, especially debt collectors,  just report to one or two of the three.) In order to see what they are reporting, we need to see your credit files.

So we need to get your credit file from each of them. You have a right to see what’s in the file they have on you.  That’s your right to a “credit file disclosure.” This would be easier to keep in your head if the “credit file disclosure” was called a credit file disclosure. But it’s not. Everybody calls your “credit file disclosure” your “credit report.” In fact, the place to go to get your “credit file disclosure” calls it a credit report. That place is annualcreditreport.com.  

Annualcreditreport.com is the place that Equifax, Experian and Transunion set up because they are required to give you one free “credit file disclosure” every year.  You can also get a free disclosure, at annualcreditreport.com, if you’ve been turned down for credit in the last 60 days. If you’ve used up your free report and haven’t been turned down recently, you can buy a credit file disclosure for $12. (The Federal Trade Commission sets this price.) That’s $12 each for Equifax, Experian and TransUnion.

We’ll help you fight to make sure your credit file is right.

I’m one of only a handful of lawyers in the country who will fight on your side to make sure your credit file is right, so that your credit reports will be right, after the bankruptcy is over.  (Now by “right” I mean that the debts discharged in the bankruptcy all say discharged in bankruptcy. Other credit report mistakes–showing you lived someplace you never lived in–I don’t promise to fix those.)

The first step is to wait two months after your bankruptcy discharge. The judge in the Terri White class action gave Equifax, Experian and TransUnion, two months after your discharge to make sure they are showing bankruptcy on all the debts discharged in the bankruptcy.

The second step is to get your credit files disclosures. Get them at annualcreditreport.com. Get one each for Equifax, Experian, and TransUnion. Try to get one because you have been turned down for credit. If that doesn’t work, try to get your free annual disclosure. If that doesn’t work, spend the $12.

Keep in mind that dozens of places will sell you, or give you for “free,” an Equifax, Experian, or TransUnion credit report. We don’t want those. You need to get your Equifax, Experian, and TransUnion “credit file disclosure.”  Where can you get those?  From annualcreditreport.com.

The third step is to send them in, so we can look at them.

Email them to [email protected]

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Jun 2013

After Bankruptcy Credit Reports–Why You and Your Lawyer Need to Follow Up

Posted by / in After Bankruptcy, Blog, Weekly Posts / 2 comments

Your After Bankruptcy Credit Report 

Your after bankruptcy credit report is a big part of your “fresh start” in bankruptcy.

That’s why it’s my job, as your bankruptcy lawyer, to make sure your after bankruptcy credit report is right. Only a handful of bankruptcy lawyers see it that way, and I’m one of them.

Mistakes on your after bankruptcy credit report can come back to haunt you years later.

Let me tell what happened to Melanie Short.

Melanie Short  (not her real name)  filed Chapter 7 bankruptcy with me in 2008.  She had owned a house in Florida.  The value dropped more than 30%.  She could not sell.  We needed to clean that up.

Melanie  also had some credit cards and other bad debt.  They got out of control when she moved back to Virginia and couldn’t sell the Florida house.

The bankruptcy went fine.  Filed bankruptcy July 2008; approved October 2008.

After bankruptcy credit report

We fixed Melanie’s after bankruptcy credit report in 2009. But Bank of America hit her credit with a foreclosure in 2011. Bank of America almost blocked her from buying a new home in 2013.

We checked her credit report early in 2009.  Lucky we did.

Equifax was showing she still owed Household Finance $3699.  After a dispute letter didn’t work, we sued.  That got Equifax to  fix it.  We also got a few hundred dollars for Melanie for her trouble.

In 2011, Melanie started getting collection calls from Bank of America.  We were getting ready to sue them–but the calls stopped and Melanie dropped it.  (I should have stayed after her.  I’m not the hero of this story.)

Fast forward to June 2013–Melanie has loan approval to buy a house again.  But, Bank of America is showing a $159,000 foreclosure on her Experian Report.  That has to come off or she can’t close the loan.

Melanie needed to get this fixed in two weeks!  With help from her loan officer and a little help from me.

Her first problem was Bank of America was not listed in her bankruptcy.  Why?  She never had a mortgage with Bank of America.

Her Florida mortgage was with an outfit called Home Loan Service, a branch of Merrill Lynch.  Merrill Lynch was taken over by Bank of America in January 2009, at the peak of the crisis.  At some point in 2011 Bank of America transferred the mortgage loan to itself.  That’s what led to those phone calls, which I should have jumped on with both feet.

Because at the time they started calling, Bank of America also hit Melanie’s Experian report with that $159,000 foreclosure.

There’s a happy ending to this story.

Melanie was able to get all this fixed, with cooperation from Experian.  (Bank of America promised they would send a letter, but then didn’t.)

What’s the lesson for you?  Check your after bankruptcy credit report to make sure everything is showing “discharged in bankruptcy” and balance $0.  Then every year or so, keep checking.

Get with your bankruptcy lawyer, or a credit report lawyer, if there’s a problem.





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