Foreclosure will affect your life much longer than the actual process itself takes. The impact to your credit will remain for years after you’ve lost your home. Foreclosure is never a good option for homeowners who are falling behind on mortgage payments but, unfortunately, sometimes foreclosure becomes the only option.
To prevent a foreclosure keep in mind that the banker is making the decision on whether to proceed with the proceedings or give you another chance to make good on the note. That is why you will get better results by being upfront with your lender. Loan modification is the best remedy. You can adjust your interest rates and/or lower your monthly payment making your mortgage affordable.
Some mortgage lenders, would prefer to avoid foreclosures with their properties and will agree to sell a house quickly for less than its market value. This is called a short sale. It can stop foreclosure, but its probably more beneficial to the bank than it is to you. A short sale acts very similarly to a foreclosure in terms of reducing your credit score, which is something you should avoid if you care about your credit score. However, if you do elect to go through with a short sale, you can expect to be able to qualify for a new mortgage much sooner as compared to if you were foreclosed on.
If you do nothing and take no effort to work with your bank, then don’t be surprised when they begin foreclosure proceedings. Here is what will happen:
The bank will send you a Notice of Default shortly after you miss your first payment ” usually after 30 days.
Then, the lender will begin contacting you and will accept even small payments to try and keep you current.
After 90 days, foreclosure begins to look unstoppable as the option for the bank to foreclose on your property opens up.
After 180 days of being in default your home could go into an auction. Once the house is sold to the highest bidder, you can leave the property. Or, you will be evicted.
Discover how a credit attorney helped a local couple get approved for a mortgage with a less than perfect credit by deleting charge offs and collection items. You can also visit creditforcouples.com to get a free credit repair letter or call 1-866-246-7311 for a free consultation with a credit expert.