Solutions and consequences of foreclosure

So your property is in foreclosure and you are desperately trying to find a solution. Hopefully, this article can provide several solutions that will help you and your family survive the storm.

Foreclosure can have adverse effects on personal and business credit for up to 7-10 years. Some say that letting a foreclosure happen is worse than filing for bankruptcy. Maybe it has something to do with the ‘American dream’ of owning a house and letting it be foreclosed on. Between the years of 2006 and 2010, everyone and their dog were losing their property. Fortunately, that doesn’t have to be you.

If your house does go into foreclosure, you could face several problems. The first is the most obvious fact; your credit score will plummet at least 450 points and the foreclosure entry will stay on your credit for 7 to 10 years. After losing your home, it will be very difficult to get another one or even rent an apartment. You sure don’t like the idea of ​​being homeless or living with friends and family. On top of that, the bank can go after you for what is called a deficiency in judgment. This occurs when your property is sold at auction, after being repossessed, for less than what you owe. So if your mortgage is $200k and your property sold for only $100k at the court steps, then you are responsible for the remaining $100,000. The bank can garnish your wages and sixteen assets you get until the $100,000 is paid off. Yes, it seems very oppressive, but that’s how the system works.

Banks these days have too much power and it is much better to get a solution rather than sit back and do nothing.

Speaking of solutions, you can always sell your property before the auction date. This way there will be no deficiency in judgment and your credit will be saved. You will have a chance to move on with your life much sooner than 7 to 10 years. If you have equity, you can sell your home very quickly to a professional investor where you can close in as little as 20 days. You will be guided through the entire process from start to finish and you will not have to worry about any step of the procedure to sell your house.

You can also sign up for a solution called ‘Short Sale’. This solution takes more than 20 days, but it’s worth it. If you owe more on your home than it’s worth, your mortgage balance may go down and your property may be sold with little effect on your credit, and in many cases, you won’t have to worry about the bank following you around. remaining balance. .

Lastly, you can also do something called a ‘Subject To’ acquisition. This solution implies that the buyer takes charge of his payments and/or updates them and takes possession of the property from that moment and releases him from any concern or responsibility. This is also a good solution if you owe exactly what the property is worth or a little more and intend to maintain stellar credit by keeping the mortgage current, but no longer intend to own the property.