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TESS VIGELAND: So let’s see if we can get some answers for Monique. She’s hardly alone in asking these questions. We’ve turned to Gabriel Del Rio. He’s with Community Housing Works, a nonprofit housing assistance program. Gabe, now that Monique has gone through a foreclosure, what can she do to get past it?
GABRIEL DEL RIO: Well at this point, once a foreclosure has passed, there is some close-out to do with that foreclosure. And that would be insuring that if there is any deficiency balance on a mortgage that did not get paid off, that the tax liability has been looked at and closed out in the scenario. When you don’t pay off a loan fully, there is a chance that you will be forgiven debt. And when you’re forgiven debt that’s taxable as income, there’s some calculating to do, I would suggest certainly with an accountant ’cause there’s a basis to take off as to what your actual tax liability would be.
VIGELAND: And how does she go about repairing her credit? What can she do?
DEL RIO: At this point, it’s about getting good history built today and going forward, and letting this bad history that’s still gonna be on the report for nearly a decade be in the past.
VIGELAND: She’s had trouble even getting rental units to look at her favorably and allow her to live there. Is there anything she can do in the immediate future to rectify that problem?
DEL RIO: Well, I think it’s always helpful and certainly this is used in lending and underwriting, to write a letter of explanation. Basically, it allows you to add the human side beyond what you see in numbers on a credit report. And you have to find the right landlord, and I realize that’s difficult. She may also be interested in looking into some sort of assisted rental or affordable rental housing that may not have so much of an issue with that.
VIGELAND: Gabriel Del Rio is director of housing assistance for Community Housing Works, a nonprofit housing agency based in San Diego. Gabriel, thank you so much for joining us today.
DEL RIO: No problem, my pleasure.
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