Should I worry that I used false information on my loan application now that I’m filing for bankruptcy?

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A couple of years ago, I bought a home and the mortgage broker I used filled out false information on the loan application. He said he was doing this to get me approved and get me a better rate since I didn’t have the documentation to satisfy the lender’s requirements. I signed the documents.

Well we ended up getting the loan but have since had some financial trouble which will require us to file for Chapter 7 bankrupcty and now I’m worried about the consequences of providing that false information during the application process.

Will that come back to bite me? Is this going to be an issue during the bankruptcy process? Will the Bankrupcy Trustee take a closer look into this? Is there a potential for me to get into trouble for this? If there is, what kind of trouble?

Or will the Bankruptcy Trustee not even notice or care?

Thanks in advance everybody.

My husband and I are planning to move soon. I say that extra payments at this point are akin to putting money under the mattress. He thinks we will get more than we put in when we sell. We understand that extra money applied to principal shortens the loan, but don’t understand how that all works. Is the loan refigured every month? every year? Where would we find out this information? Our mortgage is with US Bank – would their customer service be knowledgable enough? Thank you!

  1. Reply
    April 29, 2011 at 9:31 pm

    I don’t think you can get Chapter 7…. only Chapter 13….and they will take all of your assets to pay your debts.

  2. Reply
    April 29, 2011 at 10:07 pm

    Yes it is rather likely that this will come and bite you on the bum.;

  3. Reply
    April 29, 2011 at 10:23 pm

    Well, you surely deserve to be penalized.

  4. Reply
    April 29, 2011 at 11:15 pm

    You signed …100% your fault. And the fact that your are trying to borrow more money when your are technically bankrupt is totally illegal.

    No need to worry to much unless a FRAUD conviction , obtaining money by deception , forging and uttering and making a false statement concern you.You wonnt be totally alone , you conspiritor who assessed your loan and doctored your documents will be sharing a cell with you , unlees he plee bargains freedom for his testimony against you.

    You are meant to divulge all your financials to the trustee, he is your ally against your creditors . He was the very last hope you had in this world for protection from those about to destroy you.The courts will have no mercy on you,

    The bankruptcy trustee will climb all over you when he finds out and you will be looking at time.Serious time possibly 10 years, FRAUD and UTTERING is treated worst than murder in many states.

    There is a really good chance that when the trustte finds out he will sell all your assets as well and put your family out on the street.not to mention that you will probably never get credit again.

    You are about to discover a world of pain beyond your comprehension.

    I dont not what drove you whteher it was greed or desperation but youn will soon feel a great deal of hurt and your life is about to change big time.

  5. Reply
    April 30, 2011 at 12:00 am

    I wouldn’t do it. Invest that money somewhere that’s likely to appreciate or get you a return. Putting it into the house won’t lower your monthly payment, and isn’t appreciating. What’s the point?

  6. Reply
    April 30, 2011 at 12:43 am

    Prepaying a mortgage is the same as investing at that percentage. So if your mortgage is 6% and you send them 1,000 you save 60 a year and when you sell you get back your $ 1,000 plus all the interest you saved.

  7. Reply
    April 30, 2011 at 1:29 am

    Why not take your equity out by refinancing and keep the property, lease it out and let the property pay for itself. That’s what my husband and I will be doing in 2010. We are relocating. We will be refinancing and let the house pay for itself. It will be some added income for our retirement. The answer to the other part of your question is Yes, it would be a waste at this point if you guys are going to move soon. If you keep the property, then I would begin the process of paying off earlier by paying extra towards the principal. But be careful, because many mortgage company’s don’t want you to pay off early. You need to read the fine print on your mortgage papers whether you refinance or not.

  8. Reply
    ShamWOW!!!! (btw I'm a girl)
    April 30, 2011 at 2:14 am

    A lot of mortgage companies aren’t very knowledgeable in anything…. and that is a fact. You can ask the same question to 10 different people and get 20 different answers

    The way I look at is… and this is from experience. If you may have a hard time selling the house due to it being worth more than other homes in your immediate neighborhood then most definitely pay more to lower the principal. With the housing crisis and loan companies now making it harder to get loans then having a lower principal will make it easier for your home to sell.

    I have a home that is too large for the neighborhood. It’s out of place they say. It’s worth about $ 530,000. When the houses in my immediate neighborhood are only going for about $ 200,000 and lenders consider it a high risk property. But there are million dollar homes 2 streets down… I can’t sell my home… I don’t want too, but I did want to refinance it and I am not able too. It has nothing to do with my credit, because my credit is good enough to refinance… it’s because of the house being out of place in the neighborhood.

    I plan on paying the house off this year anyway, but from experience, I say keep paying more than you have too, that way you have an easier time selling it…

    Buying a house isn’t getting easier… so anything you can do to make it easier will alleviate headaches in the end.

  9. Reply
    April 30, 2011 at 2:17 am

    Anytime you put real hard money on your principal it is good. What I would say is to check on the sales of homes in your area as the price of houseing is not good right now. There are several homes being sucked back in by repo’s. YOU might want to think about investing in more property if you have extra money at this time. One thing I know is you will not lose on real estate. IT is proven over and over to hold and gain. Here is a good link to look at.

  10. Reply
    April 30, 2011 at 2:17 am

    I wold agree with u the economy is bad u need to save cash money as much as u can,also if u plan on moving in the States i wold say yes keep up the mortgage but don’t put extra because the real estate is really really bad this days.If u plan on living the country in 2 years its not even worth to own a home cause u wont be able to sell it.But if u are moving in the states do not pay extra save ur money cause u wont be able to enjoy them for many many years.

  11. Reply
    April 30, 2011 at 3:00 am

    Paying more on your mortgage is the most tax effective way to go.

    In other words if you invest the extra money somewhere the interest you earn will probably be taxable but the saving you realise by putting it into your mortgage will be tax free (& probably give you a better return as well)

  12. Reply
    Junius L
    April 30, 2011 at 3:07 am

    I will keep this real simple. Is it harder to sell a $ 10 shirt for $ 5 or a $ 5 shirt for $ 10? Advantages of owning real estate are: reducing taxable income, profit from sale, customization (adding a swimming pool, remodeling, etc.). Looks like the only benefit you are getting right now is being able to write-off the mortgage interest you are paying. Fact – home prices are falling and may continue to fall into the year 2011. If you make payments to principal, the odds are you’ll never see it again. If you are planning to move within 24 months, make just the MINIMUM payment you need to make to stay there. Save your cash.

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