Ask Mike

Q:

I just spoke to my credit union about getting an FHA loan to buy a home and they told me that FHA is no longer available. Is this true?

A:

Absolutely not. FHA is going just as strong as ever. I cannot speak to why they may have said this unless they are unable to offer it at that credit union and did not want to turn away business. There are currently reports out stating that FHA will likely have the largest producing year in their history this year. There are several local lenders who are doing FHA loans every day; give one of us a call.

Q:

I am trying to refinance my home and the title company is telling me that I have a large judgment against me which is stopping the loan from going through. However, I filed a Chapter 7 Bankruptcy three years ago and the judgment was included. I gave them a copy of the bankruptcy papers to them to prove this. Why are they saying I still owe it?

A:

The problem appears to be that your attorney did not file a "Motion to Avoid Lien" with your bankruptcy filing. If that is the case, then unfortunately there is little that can be done. While the bankruptcy does take care of the judgment for most purposes, it does not remove the lien form the real estate you owned when you filed the bankruptcy. The only way to resolve this is to have your attorney re-open the bankruptcy and file the motion that should have been filed in the first place. However, because it has been several years, this may not be possible. I would highly recommend speaking with your attorney about this unfortunate situation. Also, anyone else who owns their home and is considering filing a bankruptcy should keep this in mind; the motion to avoid lien is one of the most important, and most overlooked, parts of the bankruptcy filing.