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How does a forclosure look on report?


macboy
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The smart a$$ answer to your question is that it looks like you didn't pay your mortgage loan. The realistic answer is that the way it appears depends on what actually happened to the account.

When a mortgage loan becomes 120 days past due, the account is notated "foreclosure" or, more accurately, "foreclosure proceedings begun". This means you're in deep and the lender is at the point where they take action. If you don't do somthing to cure this, (selling the house, giving the deed in lieu of foreclosure, bringing the account up to date or entering some kind of payment arrangement) then the ACTUAL LEGAL ACTION of foreclosure is filed against you.

This means that a foreclosure can show twice: Once as a notation in the TL. (You're correct in that it is similar to a CO) and again in the "public records" seciton (similar to a judgment). The listings will have two separate reporting time periods also. The TL will be shielded from view after 7 years from the DOLP. The legal entry will be shielded after 7 years from the date of filing.

Having any indication of foreclosure on your credit report can make it virtually impossible to secure another mortgage loan.

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Having any indication of foreclosure on your credit report can make it virtually impossible to secure another mortgage loan.

What are such hints???

I am sure that plenty of people have a 30 day late... But what is the line that is crossed that makes it look like a foreclosure... Or at least bad enough to prevent future mortgages or refinancing...

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A foreclosure will usually show up both as a tradeline and as a public record. The tradeline will indicate the forclosure, the public record will indicate the seizure of the deed on the property by the lienholder.

This is bad, REALLY bad. The reason is that if the original loan amount was over $150,000 it will stay on your credit report forever. Loans over $150k are not subject to the 7 year limit. This is why everyone says that you should never be late on your mortgage... be late on anything else if you must, but never the house payment.

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Ratings: Industry codes which indicate, at a glance, how the account was paid in the month reported

R1 or I1 = paid on time, or at least no more than 29 days past due date

R2 or I2 = paid 30-59 days past its' due date

R3 or I3 = paid 60-89 days past its' due date

R4 or I4 = paid 90-119 days past its' due date

R5 or I5 = 120 days past due. This is the point at which SOMETHING happens. If the loan is secured by a vehicle, order for repossession goes out, if it is a CC, the account is charged off, if the loan is secured by property, foreclosure proceedings are begun.

There is no such thing as an R6/I6

R7 or I7 = Indicates that the consumer needed professional assistance managing their debt. Usually given to debts included in CCC

R8 or I8 = Repossession

R9 or I9 = Default status. This rating is assigned to all defaulted debts and may indicate repo, foreclosure, collection or charge off. It is entirely possible for a rating to accelerate from R5 to R9.

So, to answer your question. The R5/I5 rating is "the line that is crossed that makes it look like a foreclosure". For people used to reading CR's, that rating says it all. No need for a notation.

"Do mortgage lates stay on your report forever or just foreclosures?"

All derogatory information remains forever. The FCRA lists parameters, which Methuss alluded to, that allow a subscriber/lender to pull all data on you. It says (to paraphrase) that exclusions to the 7-year limit are for loans and insurance policies over $150,000 and offers of employment for over $75,000. (I'm probably forgetting one, sorry don't have my FCRA copy at hand). This is why it's a mistake to think that derogatory stuff "falls off" or gets deleted after 7 years. It doesn't. It's just shielded from view. And reporting in this manner is not sporatic either. So, no, foreclosures don't show forever.

If a creditor chooses to pull your credit within the parameters allowing them to see foreclosures past 7 years, they will see all derogatory data in your file, regardless of its' age. This is something they must be set up to do, as a subscriber/client of the bureaus (most aren't) and must pay for (most don't want to) which is why the occurence is rare. The possibility, though, exists.

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If a creditor chooses to pull your credit within the parameters allowing them to see foreclosures past 7 years, they will see all derogatory data in your file, regardless of its' age.

If this happens, the CRA is in big trouble. With the exception of the $150k+ exceptions, if a CRA prepares a report that contains any itmes which are expired, they would be in serious violation of the FCRA which forbids such a report even being prepared.

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The 150+ exceptions are the only times this can happen, unless other laws, like the Higher Education Act, trump the FCRA (fed. guarantted student loans, tax liens, & unpaid child support, which don't have the usual expiration time) But the exclusion from the usual reporting period takes place at the time the pull is generated. My point is that if the legal parameters are met, ALL derogatory data, no matter its' age, may be displayed, not just foreclosures which are older than 7 years.

The subscriber would have to be set up with the bureaus to pull these heavy duty reports, pay for them, and then specify, "yup, this pull is for an application for at least $150k (or the other legally allowable reasons)" That subscriber would get a report with all of the consumers derogatory data, not just foreclosure. So, if a foreclosure shows after 7 years, everything else would show too. If nothing else older than 7 shows, then the foreclosure isn't going to show either.

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So then, this:

(a) Information on file; sources; report recipients. Every consumer reporting agency shall, upon request ... clearly and accurately disclose to the consumer:

(1) All information in the consumer's file at the time of the request

is meaningless? If the CRA's are not sending us "all information" in our file, but only the last 7 years, how are they not in violation of this? I don't see a time limit imposed for consumer disclosure of our file's contents. What if there are inaccurate items older than 7 years? We can't see them, so they can't get fixed. And if they will have any effect on our ability to get a mortgage, I think we'd have the right to dispute inaccuracies, older than 7 years or not.

Do mortgage lenders not always pull this "full" report, but only occassionally? Our mortgage was for $170k. The loan officer (she's a friend) showed us what they got from the bureaus, and there was nothing older than 7 years on mine or my wife's report. And I did have some old derog's that fell off. So you're saying they did not specifically ask for the "full" report, just a standard one?

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"...So, you're saying they did not specifically ask for...older than 7 years..."

Yep, that's what I'm saying. I've worked in the mortgage/credit industry for 28 years and I've never seen any lender ask for a report which included older derogatory data. But the FCRA makes allowances for this type of report. So consumers need to be aware of the possibility. Most of all, we need to be aware that derogatory information does not get deleted, disappear, or spin off the earth. It's still there. And the possibility, however slight, is that it can be retrieved.

Once again, my point to the OP was that IF a foreclosure older than 7 years showed up, that ALL his older derogatory data would show. Cuz any report which included a foreclosure past its' Reporting Time Period would allow for everything past RTP.

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I have to kick in here.

Not ALL states require a lawsuit be filed in order to forclose. In SC (where I had my house), they MUST literally sue you in order to forclose. Such is not the case in all states. Even though there was a lawsuit filed against me for the forclosure, and I didn't fight it, there is NO PUBLIC RECORD of the forclosure on my credit reports. The forclosure is listed as a tradeline on all 3 reports and that's it.

So, the more accurate answer as to how a forclosure is reported really depends on your state laws and how forclosures are done. I now live in TN. They do NOT have to sue to forclose, and a forclosure in this state can be done in 30 days ! There is no lawsuit, no judgment, and again, no public record. The SC forclosure tradelines will be off my reports in the normal 7 year timeframe - and the amount was NOT above 150K.

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