Having had the opportunity to work with many sellers in dire straits, I can understand the potential of a foreclosure can be one of the most stressful times in a person's life. Harassing phone calls come multiple times throughout each day and demands become more and more bold. If a seller is unable to renegotiate their mortgage, the prospect of trying to get now, what they paid for their house in the last five is a near impossible task. It would feel easier just to pack up and walk out then to try and find a solution because for most people, it appears as though there are none.
A foreclosure will ruin your credit which will affect:
- Where you live -- In moving from a house to an apartment, landlords often pull credit before offering a lease agreement. Going from a house to a smaller apartment is a hard pill to swallow, having to move into an area where the landlord isn't concerned with a credit score could be a nightmare.
- Where you work -- While applying for a new job, employers often pull credit as well which might prevent potential candidates from being able to qualify.
- What you drive -- If/when buying a new car, both the loan rate and the insurance premium are affected by credit score.
- The simple act of getting a new cell phone contract can be denied by bad credit.
All of these issues will directly affect stability and quality of life. Explore the options, lenders don't want to foreclose. If renegotiation is an option, talk with a loan workout group who can offer all the details of a short sale (when the lien holder accepts less than what is owed in order to sell the property) possibility.
Need to know what your house is worth or if the local market has stabilized? Find out here.
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