I am going through a foreclosure

Asked by Marinsuz, Boise, ID Thu May 31, 2012

How can I still make myself and my credit report reflect that I am responsible and would be a good renter? Advice welcome.

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6
Jim Paulson, Agent, Boise, ID
Thu May 31, 2012
If I had a chance on tenants who have never owned a home or one that used to, I would almost always take a previous homeowner!

There are hundreds of thousands of people in your shoes due to this economy that have gone from homeowner's to renters until they get things back on track.

I suggest treating it like a resume with a nice "cover letter". There are free services like Neighborhood Housing Services that can offer credit counselling services to help you rebuild your credit. Occasionally, you can find owner carry contracts so you don't have to deal with the major banks if you want to buy a home.

You might even consider a lease purchase.

Keep in mind without the tax deductions for the mortgage income deduction and for the property taxes, it might end up costing more to rent than you thought.

Best of luck and hope this helps!
Jim
0 votes
Sharon Walker, Agent, Boise, ID
Thu May 31, 2012
You will have questions asked that may cloud a landlords decision about you being a good renter. I know that you are not alone out there with this type of problem and there are landlords who are renting to people in your same situation. I would just be very upfront with any perspective landlord and let them know what the circumstances are that is forcing you to go through a foreclosure. If it was something beyond your control and you are gainfully employed, I am sure that you will find someone who will give you an opportunity. Through that process, you will be able to raise your credit score over time.

I do not know if you have time left in the foreclosure process, but have you thought about selling your home and trying to get the lender to report a short sale on your credit score rather than a full foreclosure? That may be a way to soften the blow a little. Let me know if you want to talk about that aspect.

Good luck.
0 votes
Curtis Ellis, Agent, Meridian, ID
Thu May 31, 2012
Rental applications are similar to mortgage applications. Landlords and property managers are looking for security as well as responsibility. They want to know you will be there for the term of the lease and hopefully several years longer. So:

Make sure you pay all of your other bills and obligations, credit cards, personal loans, insurance payments, utilities, etc., ... on time. This will lessen the negative effect foreclosure has on your credit.

If you are working, do not change jobs. If you need to change, stay in your current field.

Also, now that you are not making your house payment, begin to set aside some cash for first & last month's rent and a security deposit. An extra $500 added to the securtiy deposit might make the difference between getting and not getting the property.

Begin looking for a rental a month before you need to move. "I need a place by this weekend" is a big red flag to a property manager.

I have some info from a credit councilor and a local mortgage broker that outlines the effect that foreclosure, short sale, or bankruptcy will have on your credit. Check out my info and, if you are interested, send me an email through Trulia and I will forward that to you.

Don't worry about the process, you are going to get through this and it will all be OK!
~Curtis
0 votes
Robby Reinha…, , Boise, ID
Thu May 31, 2012
Hello Marinsuz,

This is Robby from the Mike Dietz Real Estate Team with Silvercreek Realty Group. When dealing with a foreclosure, you may have several options. Sometimes you can refinance the loan. Another option may be a Short Sale (selling short of what you owe, asking the bank to forgive the remaining balance). In addition to Real Estate Sales, my team also manages several rental properties for Treasure Valley Investors. When considering a potential tenant, we do understand if they have recently had a foreclosure or Short Sale. We tend to look at other items in the credit/background check. For example, we would want to see if there were any recent evictions and make sure they can put the utilities in their name if necessary.

My team would love to schedule a time to sit down and discuss what options you may have. Please let us know if you have any questions regarding foreclosures, short sales, or renting.

My contact info: robby7134@gmail.com Ph# (208)703-7604
0 votes
Tim Moore, Agent, Kitty Hawk, NC
Thu May 31, 2012
If you are in the foreclosure process now there must be late payments or something negative in your credit report already and a landlord will surely pull a credit report and see it. Once there is the actual completion of the foreclosure that will also be there for all to see. I don't know how you can get around someone seeing it, you will have to explain it when they do.
0 votes
Chase Craig, Agent, Boise, ID
Thu May 31, 2012
Your best bet is to try and avoid the foreclosure...I'm sure you've already tried traditional measures, like scrambling to bring the loan current etc.

Have you thought about performing a short sale on the property?

A foreclosure sticks on your credit report for up to 7 years and has a much further negative impact then a short sale. They can also come after you for the deficiency, whereas a short sale you might be able to get them to waive that.

Give me a call at (208)284-0829 to discuss this in further detail and find out if it is right for you.

Chase
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