Keys Reasons to Avoid Foreclosure
MINIMIZING damage to the credit. Foreclosure and bankruptcy are public records that cause fatal damage to credit scores (foreclosure up to 7 years and bankruptcy up to 10 years).
MAINTAINING control and integrity. Eviction is an unpleasant experience where the borrower is forced to lose the house against his/her will.
Ways Foreclosure Can Affect You
- A foreclosure will remain as a public record on a person’s credit report for 10 years or more.
- Credit scores could drop 250 to over 300 points.
- A foreclosure affects the score for over 3 years.
Employers have the right and are actively checking the credit regularly of all employees who are in sensitive positions. A foreclosure, in many cases, is ground for immediate reassignment or termination.
Many employers are requiring credit checks on all job applicants. A foreclosure is one of the most detrimental credit an applicant can have and in most cases will challenge employment.
Alternatives to Foreclosure
REPAYMENT PLAN: Delinquent payments distributed over a period of time and added to the original monthly payment amount.
FOREBEARANCE: Temporarily allows homeowner to pay less than the amount due or suspend payments entirely for a spicified period of time.
LOAN MODIFICATION: Applies past due interest and escrow amounts to the unpaid principle and r-amortizes the loan over a new term.
SHORT SALE: Allows homeowners to sell home for less than is owed.
DEED IN LIEU OF FORECLOSURES: Allows homeowner to voluntarily transfer property back to the bank in exchange of forgiveness of debt.
BANKRUPTCY: If it is other loans, such as unsecured debt (credit cards, medical bills, etc.) that is making your mortgage un-affordable, you could file for bankruptcy but reaffirm your mortgage and car to keep those.