Dear Mortgage Guru:
In Michigan, if a FNMA mortgage gets foreclosed on and it is sold for less than what is owed, can the Lender put a deficiency judgment on the borrowers credit report?
Can they put a judgment on his credit report for a foreclosure on a HELOC that was used for the acquisition of the property?
Thanks, Mortgage Guru!
RESPONSE:
Hey, a great question!
The Guru has consulted with 2 credit reporting experts and here is what they say:
Expert #1: IF a judgment is obtained, it can (and likely will) be picked up by the repositories and will appear on the consumer's file. The real question is, if defended, whether or not a judgment can be obtained. As I understand it, it can depend on whether the loan was a purchase - in which case it may be a non-recourse loan which would prevent the lender from pursuing any shortage, vs. a refinance which may be subject to civil action. I'm unsure as to how a HELOC would be characterized; I would "guess" that if the HELOC were originated at the same time as the original purchase loan, it would probably fall under the purchase non-recourse category.
Sorry I can't be more definitive.
Expert #2: Expert #2 indicated that he/she has not seen a credit report that indicated a short sale with money owing as it usually indicates a short sale and zero. With regards to a HELOC, Expert #2 feels that yes, the HELOC can be shown as a judgment for foreclosure.
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Dear Mortgage Guru:
Do I need a commercial licesne to write as commercial deal? I am currently a Mortgage Broker!
RESPONSE:
Having a residential license does not entitle a broker to solicit commercial real estate deals. The real estate broker statute requires that a person or company have a real estate license in order to broker commercial real estate loans.
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Hey, Mortgage Guru:
How would it be possible to remove a foreclosure that actually happened, from someone's credit report?
If it's not possible, then how can companies like the following:
http://www.youwalkaway.com/ advertise that they can remove a foreclosure from someone's credit report?
How do they avoid prosecution for false advertising? Thanks!
RESPONSE:
There are no guarantees. I think that they help the homeowner arrange a deed in lieu of foreclosure after you try a short sale, which is not a foreclosure. The kit probably has FSBO stuff in it as well a sample letters to ask for a short sale and a deed in lieu. This is just a guess. deed in lieu still goes on the credit report, but it is not as damaging according to some people. A short sale does not go on a credit report that I am aware of. This is how they can make the claim they do.
****Please note that all answers provided by the Guru as solely the opinion of the Guru and the content of the Guru's answers are not the responsibility of the MMBA. The Guru's answers should not be substituted for the professional advice of legal counsel and should be considered informational in nature.