Foreclosure in Wisconsin>Question Details

31nette, Renter in Hartford, WI

We've surrendered our home, our bank purchased it on 10/22/2012. What financial hardships might we face?

Asked by 31nette, Hartford, WI Thu Nov 1, 2012

Had for 5yrs on 30yr fixed @ 6.1%, drastic decline in income, denied for 3 attempts of loan modification, threat of foreclosure with an exit date, filed chp7 bankruptcy for automatic stay, 6mons into bankruptcy the bank raised the mortgage and no longer accepted bankruptcy terms, bank unwilling to allow a short sale simply wanted the money or move, we surrendered the house ending the bankruptcy. Home went to sheriff sale 1month later and bank purchased it. We're happy renting, can't ever afford owning with our current income, would like to know what financial hardships we Might face. We didn't waste time to see if we'd be put out or would have time...found a place within 3wks of the notice of sheriff sale...we have a large family. Thanks for your help, Nett

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Hi Nett,

It looks like Mr Collins was answering you while I was typing my lengthy answer. And he gives you good advice as far as the legal ramifications. We are not allowed to give legal advice, so contacting an attorney regarding the terms of your foreclosure is the best advice. We in Wisconsin live in a state where the bank is allowed to come after you for the deficiency which means the difference between what they sell it for and what you owed in addition to late fees and attorney fees on their side. Having the right doesn't mean they will. If you have an attorney and that is what you are concerned with, then I would follow Mr. Collins advice.
0 votes Thank Flag Link Thu Nov 1, 2012
I'm sure the last 5 years have been very challenging both financially and personally for you and your family. The good thing is that it's over and now you can move on. The first place to start is to rebuild your credit. And remain current on debt obligations going forward. If you have any credit cards that have remained open after the BK, keep them opened and never be late going forward and the balances below 30% of you limits. If you no longer have any credit cards open, you and your spouse need to have at least 2 credit cards each. If you are trouble getting credit cards, you will probably have to get secure credit cards. A secure credit card is where you put money into a bank account and use that as collateral for the credit cards. I recommend to go to your local bank or credit union to see if they offer a secure credit card. If they don't you can go to orchardbank.com or creditcards.com.

So your original question is what type of.financial hardship will you expect? It will definitely be harder to get credit and you won't be able to buy another home for 3 years after a short sale under current rules. But if you take a few steps towards re-establishing credit you should be in good shape in a year or 2 with your credit score. I would recommending meeting with someone every year to ensure you're on track.
0 votes Thank Flag Link Thu Nov 1, 2012
I'm very sorry for what you have gone through. This is not an easy time for you. For now you can take comfort in knowing that you are not alone. There are millions of people going through the exact same scenario. I'm glad that you appear to be okay with renting for now. Rather than worry about the ramifications, try to concentrate on the future. What is done is done. Foreclosure can create problems for many years to come, but please notice that I used the words "can".

I personally believe, because of the magnitude of the foreclosures that have occurred in the past five years, that it will not have exactly the same ramifications that it once had. The best thing you can do right now is live within your budget and begin to repair your credit. I'm hoping that someone here on Trulia will answer you as to how to do that, such as a lender or credit repair person. However, I can tell you a couple things you can do right now.

1. Open a savings account if you don't have one. Make a deposit every month - no matter how small - ($5.00 if that's all you have).
2. If you have credit cards in good standing, keep them that way. Use one of them to charge things like groceries or gas. BUT MAKE SURE YOU HAVE THE CASH TO PAY FOR IT BEFORE YOU CHARGE IT AND PAY IT EVERY MONTH!!! ON TIME!!! Kohl's has policy where you can charge an item and pay for it AT THE REGISTER in the same transaction - a great way to build good credit.
3. Keep all current bills (rent, utilities and such) on time.

When the economy gets better (and it will get better), if you decide to purchase again in the future, most likely you will be paying a higher interest rate due to your foreclosure. In fact, you will find that in most types of purchases such as car loans and other credit. But it won't last forever. If you continue to keep the rest of your credit in A-1 shape, it will help you greatly in the future.

Hope this helps you somewhat and I wish you all the best.
0 votes Thank Flag Link Thu Nov 1, 2012
You will want to contact legal counsel about this. They can discuss the possibility of a deficiency with you.

Realtors® and real estate agents are not allowed to discuss legal matters or give legal advice. Sorry.

Michael Collins- SFR, BPOR
Broker
Rock Realty Wisconsin
608-921-8536

My Trulia Blog:
http://www.trulia.com/blog/RockRealty/
0 votes Thank Flag Link Thu Nov 1, 2012
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