A foreclosure occurs when the homeowner has failed to make payments and has defaulted or violated the terms of their mortgage loan.
For many homeowners, their monthly mortgage payment is now a constant source of stress. If you’re a homeowner whose home is in foreclosure, you may be wondering what’s going to happen next.
Unfortunately, the process can can have long-lasting consequences, such as:
- You will always have to disclose that you have had a foreclosure on any mortgage application and some job application you submit in the future, and this can have an adverse affection your future mortgage rates. This is the only credit item that is asked specifically and does not rely on what is on an individual’s credit report.
- Credit scores will be lowered by 300+ points, and a foreclosure is the most devastating credit issue in relation to future credit availability.
- A foreclosure is the one credit report item that is almost impossible to have “repaired”.
- Your lender can seek a deficiency judgement against you and collect for any amount they do not recuperate at bank sale.
- Many current employers run credit checks on prospective employees, and foreclosure is one of the top items that will put a potential new hire in jeopardy.
- Many current employers run credit checks, and a foreclosure can put a current position in jeopardy.
- Security clearance and government positions, including but limited to military and law enforcement, can be jeopardized by a foreclosure.
- You may be responsible for any deficiencies after foreclosure for an indeterminate period of time depending on the state that you live in. This can land you in never ending collections.
A foreclosure can usually be avoided—even if you already received a foreclosure notice.
It’s important to know your options and understand their impact on your financial future. As your Certified Distressed Property Expert® (CDPE®), I will explore every option and work toward a resolution.
While some choices may be difficult to make, having the information will help you feel more in control and ready to move forward.
It may not seem like it now, there will come a time where your current financial troubles will pass. You will feel much better knowing that you did everything you could yo avoid this devastating situation that so may people face today.
Dana is married to the highly esteemed Dr. Dana W. McGinty, a Washington, DC internal medicine physician and medical correspondent. They are often referred to as “The Danas”.