Losing your home to foreclosure is a painful experience, no question about it. After surviving that trauma, you are left to deal with a damaged credit record that can take years to repair. Even worse, though, is the common opinion that foreclosure is the result of irresponsible behavior on your part.
There is some good news, though! Transunion, the credit reporting company (really!), discovered some interesting evidence in a recent study of these questions -
•1. Does a foreclosure on your record predict a future of missed payments and defaults? The answer - not necessarily!
•2. Is there a difference in later payment problems between those who lost their homes as a result of a one-time event and those who have had a history of payment problems? The answer - yes!
What they discovered was this: people who maintained good payment records prior to the one major event that led to their current credit problems went back to their good habits after foreclosure.
Lenders, sellers and landlords should be aware of these different behavior patterns. Carefully review the credit records and current situations of potential buyers or tenants. Don't lose out on a potential successful transaction, not to mention the opportunity to help a fellow man (or woman) to get back on their feet after financial trauma.
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