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Ringwood ready to enforce property maintenance standards in cases of …

Thanks to a law recently passed by the state Legislature, local officials will now find it easier to find and fine lenders who are in the process of foreclosing on properties that have been vacated or abandoned in the borough.

S-1229, signed into law in August 2014, not only requires out-of-state creditors to designate an in-state representative with the municipality where the property is located, it also authorizes municipalities to levy fines against said creditors for failing to comply with the law or to maintain the exterior of properties that are undergoing foreclosure proceedings.

As a result, municipalities throughout New Jersey are drafting and passing ordinances to create a process for collecting fines and placing liens against such lenders. In Ringwood, ordinance 2015-02 establishes an entirely new chapter in the municipal code to cover the maintenance of vacant and abandoned residential properties during foreclosure. The measure was introduced during the March 3 Borough Council meeting and adopted on March 19, with all council members present voting in favor of it.

On March 3, Borough Attorney Richard J. Clemack explained how the new ordinance will enable the borough to enforce property maintenance standards on homes that are going through foreclosure.

Out-of-state lending institutions must now provide the borough with the name of their in-state representative within the 10-day period they are given to inform the municipal clerk that an action to foreclose on the property has been filed.

“If neither of those things is done, that’s a penalty,” Clemack said.

As determined by state law S-1229, a fine of $2,500 a day can be issued to creditors that fail to provide local officials with in-state contact information on homes that are going into foreclosure.

In addition, the borough’s exterior property maintenance standards will now have to be upheld by the lending firm that has filed for foreclosure. Violations of this code include rubbish piles, uncontrolled weed growth, the dilapidation of structures and anything that might cause a health or fire hazard, such as an abandoned well or uncompleted excavation.

“The lending entity is now responsible for the maintenance of these properties,” Clemack said. “Property maintenance officers can serve summonses on those folks to clean up. If they fail to clean up, fines will be imposed upon them.”

The ordinance provides the lending entity 30 days to correct most violations, although that period is shortened to 10 days in instances that “present an imminent threat to public health and safety.” If the lending institution fails to correct violations within the allotted time frame, the firm can be fined $1,500 per day.

Should the lender fail to address any violations for which a summons is issued, the fines become a lien against the property.

Before the vote was taken on March 19, Borough Manager Scott Heck said it would be beneficial to all Ringwood residents.

“This ordinance is going to help us to make sure that our neighborhoods are kept up,” he said.

Although borough construction officer Mike Hafner has successfully tracked down such creditors in the past, Heck said that the problem of abandoned properties isn’t going away any time soon.

“Mike’s been very successful getting after some of these lenders,” he said. “But with the economy the way it is, there are a lot of homes that have these issues.”

Councilman Jim Martocci agreed.

“We’ve had several instances in the Skyline Lakes area where houses have been abandoned, sometimes with trees going right through the buildings,” he said. “An unkempt property affects other properties, all the way down the line.”

“This is really going to help,” Heck said. “If a property falls into disrepair, we now contact the lender to try to get them to maintain it.”

The new ordinance will take effect on April 8.


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Foreclosure to Home Free, as 5-Year Clock Expires

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Home sales avoid winter downturn

The dominant storyline out of last year’s housing market in the Mansfield area, apart from the fact it finally showed a marked recovery from the housing crash of 2008, was evidence the recovery would’ve been even greater had it not been for a rough winter that kept people indoors.

Only a handful of local people bought or sold houses last winter, and the dearth of activity cast a pall on Mansfield’s home sales figures for the rest of 2014.

The winter that just ended, however, was just about as trying as the one that came before, at least during January and February. Yet the local real estate market largely avoided the hibernation it went into a year earlier.

“Activity levels in February were extremely robust across the Buckeye State as our sales totals reached the highest mark for the month since 2007. We’re also experiencing a continued uptick in the average price, an indication that housing is a solid, long-term investment,” said Greg Hrabcak, president of the Ohio Association of Realtors.

“Favorable interest rates and an improving economic climate are helping the state’s housing market re-establish a stable foundation. As we move into the traditional spring home-buying season the profession is hopeful that we’ll see an increase in the number of homes being marketed for sale, a key factor in ensuring that the progress we’ve attained continues.”

For February alone, home sales figures in the 20 Multiple Listing Service regions tracked by the association were predictably volatile given the relatively light degree of activity, with 11 seeing an increase in sales over last February and nine posting decreases. The Mansfield service was on the plus side, with sales up 24.1 percent.

Mansfield’s average home price in February, however, dropped just a bit compared with the same period a year before, by 1.5 percent, to $84,852. Statewide, 12 listing service zones saw home prices rise while prices dropped in eight others.

For January and February, home sales in Mansfield edged up by 6.1 percent compared to the same winter months a year earlier. Sales picked up in 11 other listing service zones around the state as well.

For the same two months, Mansfield’s average home price ticked up 1.6 percent over last year to $84,983, in keeping with the upward pricing trend in three-quarters of the state. The local average is well below the state average of $137,250, however, led by Columbus at $178,228, while the eastern Ohio counties near Wheeling, West Virginia, have the lowest average sales price of $80,095.

There were 261 Mansfield properties in some stage of foreclosure in February, with 328 other properties for sale. Mansfield’s highest concentration of foreclosed properties last month, one in every 687, was in ZIP code area 44906, west of downtown.

The average rate on a 30-year mortgage in Ohio is 3.61 percent, well below the average of 4.22 percent a year ago. Rates have not recovered since dropping sharply last September.


Twitter: @ToddHillMNJ

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Sounding Off: Southern Denton County readers discuss Vista Ridge Mall facing …

RAISE YOUR VOICE: Share your own opinion online at Sign up for Sounding Off or submit a guest column (and include your full name and contact information) by visiting

Vista Ridge Mall is late on its loan and facing foreclosure. How would a foreclosure affect southern Denton County? Do you shop at the mall?

Phil Miller, Double Oak: I have been buying gentlemen’s apparel at the Macy’s at Vista Ridge for years — quality clothing at a reasonable price. Though the last time I was there, they neglected to remove that annoying plastic anti-theft device from some newly purchased slacks, necessitating an unwelcome return visit.

Be that as it may, the prospect of a cavernous, closed mall looming like one of the spooky abandoned buildings around Chernobyl is not pleasing, though it would make a great house of horrors come Halloween.

Since we have retail coming out our ears anyway, what they ought to do is tear the whole thing down and put up something we really need — a park. Hey, I know green space is like kryptonite around North Texas, but I can dream, can’t I?

Gale David, Flower Mound: When I moved to this area, the only place to shop the major stores locally was Vista Ridge Mall unless you wanted to do some serious traveling. Also, there was practically no online shopping and very few movie theaters in the area, and no Grapevine Mills. Now, admittedly, I am not a lady who likes to shop. Actually, I hate to shop. So maybe my perspective on this matter isn’t sufficiently relative to the fate of Vista Ridge Mall, but here it is anyway.

The investor should have been progressively upgrading the mall to keep it current, including landscaping, perhaps a park-like area, children’s play area or a dog park, etc., externally, and offer shopping people want these days, such as pet and spa services.

But time marches on and many newer developments are incorporating shopping and dining venues into residential, park-like areas such as the new developments on south FM2499 and the currently under-construction Riverwalk in Flower Mound. There have been major shopping, dining, specialty and business additions to the Flower Mound-Highland Village area along the northern FM2499 corridor and the intersection of FM2499 and FM407. Ergo, together with the conveniences afforded with Internet shopping, many of the folks in this area do not need to brave the traffic to travel to Lewisville to shop or seek entertainment.

In order for Vista Ridge to remain a viable shopping alternative, it will need some major renovations and possibly popular events hosted to draw shoppers to their stores. I, personally, visit Vista Ridge only once or thrice a year now — usually to visit Dillards, Macy’s or Sears, and that is usually to pick up something I ordered online or to visit one of the chain restaurants around the mall (Red Lobster, Olive Garden) that have not (yet) opened in Flower Mound-Highland Village.

Doris Taylor, Highland Village: While I do not shop a lot at Vista Ridge Mall, the closure of a shopping area that large would have a devastating effect on the economy.

The number of employees who would lose their jobs would have a major ripple effect on Flower Mound, Lewisville and Highland Village as well as other surrounding communities.

The Shops at Highland Village pull a lot of shoppers from the mall, but parking there is such an issue that I cannot imagine the parking problem if all mall shoppers shifted to The Shops at Highland Village. In addition, sales taxes that benefit Lewisville would go to other areas — possibly Denton or Dallas.

We need Vista Ridge Mall. There are no other large anchor stores conveniently located to the Lewisville-Flower Mound-Highland Village area. Going to Dallas to go to Macy’s or Dillards is not an option for many people. Maybe if we all plan a shopping trip to support the mall’s continued presence, the future might change. We need to support our local merchants.

Louis DeGiulio, Flower Mound: I don’t think foreclosure of Vista Ridge Mall will impact the residents of southern Denton County as long as the retail tenants continue to operate. I occasionally shop at Vista Ridge at the Sears and J.C. Penney stores. That’s about it. I have moved about 50 percent of my apparel shopping to the Internet.

Vista Ridge needs an interior facelift. It needs new tenants. However, I think the long-term prognosis for indoor shopping malls is bleak. There simply is too much competition from online and big-box discounters. I predict that Vista Ridge Mall will be a retail desert by 2020.

Ron Brodt, Lewisville: I don’t believe there will be any impact on southern Denton County due to the foreclosure action against Vista Ridge Mall. This is a paper process, not a physical process.

I don’t see any stores being forced to close; they will merely send their rent checks to a different location until the lender can find someone else to buy the property.

The property is very sellable as there are few, if any, store vacancies and the property has been well maintained. Vista Ridge has strong anchor tenants and a good variety of other stores people want to buy from. I have shopped the mall and have been happy doing so. We are not going to wake up some morning because of the foreclosure and find a big hole where the mall used to be. Life will go on and the lawyers and lenders will battle it out behind the scenes.

Doug Fulmer, Flower Mound: My family used to shop regularly at Vista Ridge, before there was nice shopping in Flower Mound. But with all the development in Flower Mound, there is no longer any reason to travel all the way to Vista Ridge.

If the mall closes, I’m sure there will be some economic impact (mostly lost jobs), but most of the shopping is available at other sites in Flower Mound. The tax revenue will flow from the new sites, replacing Vista Ridge. Most of the jobs will just move from one retailer to another. And with the completion of Lakeside, there will be even less need to drive all the way to Vista Ridge.

The downside would be a very large space going to seed if it is not redeveloped or refinanced by another investor. What we don’t need is one more abandoned, run-down commercial property. Investors are too worried about taking the revenue stream and not worried enough about redeveloping the property to keep it current and competitive.

Barbara Kuykendall, Highland Village: If foreclosure takes place, that does not mean the mall would go out of business. I believe there are other avenues to be explored.

That being said, should it happen that the mall does close, I think proper, appropriate people should think about what can be done with it so we are not left with a huge eyesore of a deteriorating building and a parking lot overgrown with weeds.

Could it serve some educational purpose for local schools or a college perhaps? Could some business turn it into their office space with lots of renovation? Some incentive would have to be offered, I am sure.

I hope Vista Ridge does not close as I do shop there some; however, I would hope that there is some thought going into what can be made of all that space should closure be the end result.

Lorrie Slaughter, Lewisville: Malls are going the way of the dinosaurs, so the foreclosure doesn’t surprise me. Eventually the tenants will leave and southern Denton County will be left with a “ghost mall” that will be vandalized and broken into by the homeless who need shelter and by the criminal element. It will be a blight on the cityscape of Lewisville.

Nothing makes a bad impression on businesses that are considering corporate relocations to the area like an abandoned mall, especially fronting the highway that runs through Denton County. If no one takes it over, I think the mall needs to go, except for the movie theater that is nearly free-standing as it is now. It would be grand if a newer type of retail came to that space.

Mary Ellen Miksa, Lewisville: Hopefully the delinquent note will be purchased by someone to at least keep the mall operational until a better alternative use can be found for the property. It would be a shame for it to get abandoned and go into disrepair.

I haven’t been to Vista Ridge Mall or any mall in years. I mostly shop online. The fact that Vista Ridge Mall has not been a draw in some time is sad.

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FHFA: GSEs Completed Nearly 66000 Foreclosure Prevention Actions in Q4

money-life-preserverFannie Mae and Freddie Mac completed 65,900 foreclosure prevention actions in the fourth quarter of 2014, which included loan modifications, repayment plans, forbearance plans, short sales, and deeds-in-lieu of foreclosure, according to the FHFA’s Q4 2014 Foreclosure Prevention Report issued late Thursday.

According to FHFA, nearly 41,000 out of those 65,900 foreclosure prevention actions (62 percent) completed in Q4 were permanent loan modifications; 33 percent of borrowers who received loan mods had their payments reduced by 30 percent or more, according to FHFA.

Approximately 11,300 borrowers remained in their homes after agreeing to repayment plans, and about 2,500 received forbearance plans, according to FHFA. The total number of home retention actions during the quarter was approximately 55,000, down slightly from Q3′s total of nearly 60,000. The number of overall foreclosure prevention actions (including home forfeiture actions) declined slightly quarter-over-quarter in Q4 from 72,700 to 65,900.

“Keeping families in their homes continues to be a top priority for Freddie Mac and we exhaust every workout option to do so,” Freddie Mac recently wrote on its blog.

The number of home forfeiture actions completed in Q4 also declined slightly from Q3 (12,900 compared to 10,800). Short sales for Q4 totaled 7,600, while about 3,200 borrowers received a deed-in-lieu of foreclosure, according to FHFA.

The fourth quarter total of foreclosure prevention actions completed by the GSEs lifted the total number of such actions in 2014 to 307,200 and the total since the GSEs were taken into conservatorship by the FHFA in 2008 up to 3.4 million.

The serious delinquency rate (90 days or more past due or in bankruptcy or foreclosure) on loans backed by the GSEs dropped to 1.9 percent in the fourth quarter, near pre-crisis levels. By comparison, the serious delinquency rate on Federal Housing Administration (FHA) loans in Q4 was 6.0 percent, and for Veterans Affairs (VA) loans it was 3.4 percent, according to FHFA. The nationwide serious delinquency average for all loans during the quarter was 4.5 percent.

Third-party sales and foreclosure sales (completed foreclosures) on GSE loans declined in Q4 by 7 percent down to 36.200. Foreclosure starts experienced a slight decline, down to 74,000. REO inventory fell by 8 percent to 111,000, during Q4, according to FHFA.

Approximately 2.8 million of foreclosure prevention actions (82 percent) completed by the GSEs since 2008 have helped homeowners stay in their homes, and about 1.8 million out of those homeowners have received permanent loan modifications. More than one million homeowners have received a form of assistance such as a repayment of forbearance plan to allow them to remain in their homes. About 605,000 homeowners received assistance in the form of short sales or deeds-in-lieu that allowed them to leave their homes without foreclosure.

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HBA: Beware of buying a foreclosure ‘bargain’

It’s an unfortunate result of the recent recession — many families who had not been able to keep up with their mortgage payments lost their homes to foreclosure. And foreclosed homes often sell for less-than-market rates, making them seem like a bargain to buyers who are used to the inflated prices of a few years ago.

“Buying a foreclosed home can be a real bargain – but if the foreclosure process was not accurately completed the new homeowner could be divested of ownership due to a faulty foreclosure,” said Jamie Sulcer, NWI Sales Manager of Chicago Title Insurance Co.

But comparing a new home to a foreclosure on price alone is a mistake. You can’t put a dollar value on your peace of mind, safety, financial reserves and time — all of which could be in jeopardy if you buy a foreclosed home.

For example, a foreclosure could have legal issues. Before buying a foreclosed home you will have to do thorough research — or hire a title company or lawyer — to make sure there aren’t any additional financial or legal liabilities attached to the home. There may be liens on the property for unpaid taxes, home owners’ association dues, or the home may have been put up as collateral on other loans that weren’t paid. You could become liable for thousands of dollars of debt you weren’t aware were attached to the foreclosed home.

“A real estate attorney or title company should be able to provide a comprehensive review to be sure that everything has been done in compliance with the law. Such a review would determine whether the homeowner’s right of redemption has expired, whether all liens and junior encumbrances on the property have been extinguished, and whether any robo-signing issues may be a problem,” stated Sulcer.

“A bona fide purchaser without prior knowledge of any of these issues who purchases owner’s title insurance can take comfort that a comprehensive title review will almost certainly prevent them from being divested of ownership due to a faulty foreclosure and in the unlikely event proceedings are instituted, the insurance company can limit their damages.”

As soon as you take ownership of a foreclosed home, anything that breaks or any problems that arise are your responsibility. This could cost you lots of time and money that you may not have budgeted for.

With a new home, maintenance won’t be an issue for a while with the brand-new appliances and systems. And if something does go wrong in the first year, there is often a new home warranty that guarantees repair or replacement.

Foreclosed homes also often haven’t been taken care of by former owners who knew they were going to lose the home. In some cases vandals, thieves or even the owners have damaged the home, removed appliances or torn apart walls to remove copper pipes that are valuable as scrap metal.

A foreclosed home could have been sitting vacant for months or years, and if it wasn’t properly secured, there could be significant damage from water, mold, weather or pest infestations. It could cost you thousands of dollars and a lot of time to bring a home that was allowed to deteriorate back to a livable condition.

You also don’t have to spend time or money changing someone else’s design preferences with a new home. No tearing down wood paneling, repainting walls, or replacing outdated flooring. Your preferences are included as the home is built, and they are there waiting for you the day you unpack your boxes.

Finally — and most importantly — don’t forget safety.

New homes have been constructed under a strict set of codes and standards, and have to be thoroughly inspected before the certificate of occupancy is issued and you are allowed to close the sale and move in.

With a foreclosure, you don’t know how many renovations or repairs have been made over the years, or who made them. There could be faulty wiring, weakened structures or other conditions that could be dangerous and costly to bring up to safe and modern standards.

When you are looking for a place to keep your family safe and to build a lifetime of memories, it may be well worth paying a higher upfront cost to get convenience, modern features and peace of mind — and avoid the potential pitfalls of a foreclosure that could turn your dreams of homeownership into a nightmare.

The Home Builders Association of Northwest Indiana is a not-for-profit trade association of builders and associated industry professionals dedicated to promoting the American dream of home ownership. Phone (888) 812-9099 or visit

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AG Obtains $1.9 Million Judgment Against Lawrence Company Over Predatory …

Pinnacle Financial Consulting, LLC and Owner Robert Burton Prohibited From Doing Business in Massachusetts; Commonwealth Previously Obtained Judgment Finding Defendants in Contempt for Violating Court Orders

BOSTON – March 27, 2015 – (RealEstateRama) — A Lawrence financial and legal services company and its owner have been ordered by a judge to pay more than $1.9 million for preying upon vulnerable consumers during the foreclosure crisis and engaging in the unauthorized practice of law, Attorney General Maura Healey announced today.

Pinnacle Financial Consulting, LLC and its owner, Robert Burton, have also been permanently prohibited from marketing, soliciting, or receiving fees in relation to providing loan modification, bankruptcy petition preparation, legal document preparation, and financial advising services.

“Our office will stand firmly against those who seek to exploit struggling homeowners for their personal gain,” AG Healey said. “This judgment should send a strong message that predatory foreclosure and loan modification scams will not be tolerated.”

According to the lawsuit, filed in Suffolk Superior Court in March 2013, the defendants misrepresented to consumers the services they could provide, exaggerated the benefits of their services, charged unlawful advance fees, practiced law without a license, often failed to take any action to provide the promised services after receiving payment, and refused to provide promised refunds upon request. The defendants targeted financially desperate consumers, particularly minority and non-native English speakers, and marketed themselves as low-cost alternatives to attorneys and traditional law firms.

According to the judgment, entered on March 17, the defendants obtained at least $1.2 million from more than 600 Massachusetts consumers who fell victim to the defendants’ predatory scheme. In addition to defrauding their victims of desperately needed funds, the defendants caused victims to fall further behind in their mortgages, lose their homes to foreclosure, commence ill-advised bankruptcy proceedings and lose their retirement savings to fraudulent investment opportunities.

In November 2013, a judge ordered the defendants to pay more than $240,000 after persistently and willfully violating the terms of preliminary injunction orders obtained by the AG’s Office, including by continuing to solicit consumers and receive payments for loan modification, bankruptcy petition preparation, legal document preparation and investment services.

Under the terms of final judgment, Pinnacle and Burton are ordered to pay the Commonwealth $1.9 million, including $1.2 million in restitution for affected consumers and $665,000 in civil penalties. The defendants are also ordered to pay the Commonwealth more than $55,000 in attorneys’ fees and costs.

Under Massachusetts law, consumers should not be charged advance fees for foreclosure-related services. In 2007, the AG’s Office issued regulations that prohibit soliciting or accepting an advance fee in connection with foreclosure-related services, or advertising services without disclosing exactly what is offered to avoid foreclosure, among other unfair practices.

If you are facing foreclosure, or the foreclosure has already occurred, the AG’s HomeCorps program may be able to help by offering access to a variety of foreclosure prevention or recovery services. Contact the HomeCorps Hotline at 617-573-5333 or visit

This matter is being handled by Assistant Attorney General Justin J. Lowe and Division Chief Stephanie Kahn of AG Healey’s Consumer Protection Division, with assistance from Paralegals Sarah Petrie and Krista Roche, and Chief Kevin McCarthy from the Civil Investigations Division.

Media Contact

Jillian Fennimore
(617) 727-2543

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Tuesday deadline to avoid tax auction for delinquent property owners

Andy Meiser spent Friday knocking on doors.

Its true that the Oakland County treasurer is up for election in 2016, but thats not why Meisner was going door-to-door.

March 31 is the deadline for owners of foreclosed property to pay their property taxes or work out a payment plan to avoid a tax auction later this year.

Meisner was visiting those properties.

Ive been all around the county, Meisner said Friday afternoon. Were just trying to make some last-ditch efforts to get them on a payment plan before the March 31 deadline hits.

The properties the office is focused on reaching are those that have been behind on property taxes since 2012 or before. Tax foreclosure in Michigan is a three-year process.

Two weeks ago, there were more than 2,200 on the list. Meisner hopes fewer than 800 will actually be auctioned off after Tuesdays deadline passes.

The treasurers office keeps track of forfeited and foreclosed properties.

Forfeited means an owner is behind on property taxes for more than a year and the treasurers office places a lien on the property. Foreclosed means a judge has ordered the treasurer to take the property and sell it.

Its the foreclosed group Meisners trying to reach to avoid a tax sale.

We really want to prevent foreclosure if we can, Meisner said.

Homeowners behind on their property taxes should contact the treasurers office for assistance.

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Foreclosures, delinquencies fall in Corridor

Foreclosure and mortgage delinquency rates fell in Cedar Rapids and Iowa City in January compared with the same month of 2014, according to CoreLogic of Irvine, Calif.

The rate of Cedar Rapids area foreclosures among outstanding mortgage loans was 0.94 percent for January, a decline of 0.52 percent compared with 1.46 percent in January 2014.

Foreclosure activity in Cedar Rapids also was lower than the national foreclosure rate, which was 1.46 percent in January. That compares with 2.04 percent in January 2014.

CoreLogic data showed 2.61 percent of Cedar Rapids mortgage loans were 90 days or more delinquent in January, compared with 3.17 percent for the same month of 2014.

The rate of Iowa City area foreclosures was 0.41 percent in January, a decrease of 0.36 percent compared with January 2014 when the rate was 0.77 percent.

CoreLogic data showed 1.12 percent of mortgage loans in Iowa City were 90 days or more delinquent in January compared with 1.65 percent for the same month of 2014.

The foreclosure rate measures the percentage of loans in some stage of the foreclosure process. A foreclosure is defined as the legal process by which an owner’s right to a property is terminated, usually because of default.

The mortgage delinquency rate measures the percentage of loans that are more than 90 days past due, including those in foreclosure and real estate owned by banks.

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Getting A Mortgage After Bankruptcy And Foreclosure

If it’s the American Dream to own a home, it’s the American Nightmare to file for bankruptcy. In the late Aughties (that’s the 2000s) the U.S. housing market collapsed and the economy began its freefall; by the time the economy struck bottom in March 2009 more than 1.2 million parties had filed for bankruptcy in the previous 12 months. By March 2010 that figure had shot up to 1.5 million. Blame job loss – unemployment peaked at 10% in October 2009 – as well as divorce and medical expenses. From 2008 through 2013 total foreclosures reached 17.9 million.

But the rate has been getting lower all the time: In the 12 months ended December 31, 2013, the number of bankruptcies had dropped to 1 million, and by December 2014 it had fallen to 910,000. Meanwhile, last month (February 2015) unemployment fell to 5.5 percent, the lowest since May 2008, while in December 2014 new-home sales reached a six-year high. Right about now sounds like the time to buy into the Dream. But what about doing it after living the Nightmare?

Step by Step to Rebuilding Your Credit

Well, you’re going to have to show some discipline. And some pay stubs. And dance a few more steps.

a.) Find out your credit score. (Yes, that’s why you’re seeing all those TV ads promising free credit scores.) By law, the traditional three agencies, Equifax, Experian and TransUnion, are required to provide a free score once a year. Once you see them, do you see any mistakes? If so, challenge them on the company’s website. Why is it so important that they get it right? According to the 2005 Experian National Score Index study, Americans who have filed for bankruptcy have an average credit score of 604, compared with an average of 677 for non-bankruptcy types. The higher your credit score, the less interest you’ll have on that mortgage payment: 1.5 to 2 percentage points less. (Also, see What Do Credit Score Ranges Mean?)

b.) Stay at your job: That shows a potential lender that you’re trustworthy.

c.) Rebuild your credit: Obtain two or three secured credit cards, charge only small amounts, and keep them paid off. Take out a small loan, either a personal, car or student loan, and pay it off quickly. Never make a late payment. Always make an early payment. Always pay your rent on time. Never bounce a check, and consistently stash cash in your savings account. (Also, see The Best Credit Cards After Bankruptcy.)

e.) You must learn patience: If it’s been less than two years since filing for bankruptcy, you wait. If you’ve lost your home to foreclosure, it’s longer: you have to wait three years. And the countdown clock doesn’t start when you’ve loaded the last box on the moving van; the lender has to complete the foreclosure. After the waiting period, make sure you are fully prepared to apply for a loan. Ask yourself if you have a good debt-to-income ratio. Is your life stable? (No high medical bills, for example.) And have you logged a goodly amount of time on the job? (Promotions count!) Have you a retirement plan or assets in a 401(k)?

f) First the good news: Counterintuitively, if you’ve gone through foreclosure real estate agents and mortgage brokers looked upon you favorably: you’re a motivated buyer – you’ve bought a home, and lost one, and now you’re back again. You’ll do whatever it takes. And more good news: the foreclosure could be your only credit problem, which means you might be able to clean up the mess a little more quickly.

g) The Government is here to help: Almost all lending institutions – banks, credit unions, and mortgage lenders – will work with Government-sponsored programs. There are two: There’s the Federal Housing Administration (FHA), and the Department of Veterans Affairs (VA), which is available only to veterans of the honorably-discharged variety.

h.)Back to bad news: If that foreclosed loan was backed by the FHA or VA, it’s now being tracked by CAIVRS, a Government database. CAIVRS is almost as bad as the NSA: you’re ineligible for another Government-backed loan until you’ve repaid the government.

i.) Seek preapproval: If you’ve been foreclosed upon, the lender must preapprove your new home loan, so check with the lender first before starting the search. In fact, check with a real-estate pro before the lender just to ensure you’ve filled in all the boxes.

j.) Size matters: Prepare to make a good-size down-payment: 10 to 20%. Also, prepare for a higher interest loan. And don’t look for a McMansion: or Monticello, or Mount Vernon or… you get the drift. Find a fixer-upper, a slightly ramshackled place in a gentrifying neighborhood, something that has flood damage without the mold, an older condo, a co-op, maybe a mobile home, something repossessed by a bank or seized by the Government for illegal activities. Yes, that former meth lab could be home sweet home.

k.) Shake the family tree: The lender may want a co-signer, and a relative may be willing to co-sign. This, of course, leaves them responsible if you blow off house payments. Make sure they’re familiar with you, your morals, your finances, your credit score and your payment history. Make sure they trust you, and make sure you don’t ruin their credit. But seriously, only do this as a last resort.

The Bottom Line

Filing for bankruptcy sucks eggs. Huge, rotten, ostrich eggs. But that doesn’t mean you should give up on the American Dream. Yes, you’ll have to rebuild your credit, which takes time and effort. But it’s something you can work on right away to start washing that foul taste out of your mouth.

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