Should I let my home go to foreclosure sale?

Owning a home is the American Dream right? Right! Well, it is a great accomplishment to buy a home of your very own, so when trouble hits and you are faced with losing your home it can be a very stressful situation. These days there is a silver lining; banks across the country are offering programs for homeowners which are designed to help them get back on their feet.

There are a few things to consider before you decide to let your home go to foreclosure sale.

1.)  Just because your home is currently IN foreclosure doesn’t mean you have lost it. In Colorado the bank will usually set a sale date on your home (the day that your home will go up for sale at public auction) about 6-9 months after you stop making payments. This means you have time to work something out with your bank.

2.)  Letting your home go to foreclosure is very damaging to your credit and will affect your ability to buy another home in the future. Also, in most states you may still be liable for the deficiency balance on your loan.

*What does this mean to you? If you owe $300,000 on your home and it sells for $150,000 at the foreclosure sale, you may be personally liable for the remaining $150,000.

3.)  Most banks offer short sales, deeds in lieu, or modifications to help you save your home

4.)  If you participate in one of the workout options that your bank offers it may drastically limit the damage to your credit, even if you are already late on your payments.

So, in short, no, you shouldn’t let your home go to foreclosure sale, unless it is as a last resort and your only option.