A mortgage foreclosure will prevent a family from owning a home for 10 years. In addition to this, credit scores will plummet over 250 points once a foreclosure is recorded. Poor credit can affect the ability to get a job, cause job loss for individuals with a security clearance and create an inability to purchase anything utilizing credit for lengthy periods of time.
Foreclosure is a very scary word. However, it is a word that is become more and more common in thousands of American households each and every day. Knowing the options available to stop a foreclosure from clouding your credit for many years to come is half of the battle.
Most families don’t stop paying a mortgage because they don’t want to. Typically, there are four major reasons that paying a mortgage becomes overwhelming and cumbersome:
1. Job loss – unemployment rates are at an all time high. Most families do not have the reserves needed to escape foreclosure and stay current on necessities such as food, transportation and power.
2. Divorce – Since 1999, divorce has been the leading contributor to he foreclosure rate.
3. Health – many people become ill or disabled, preventing them from working and preventing them from paying their mortgage due to the rising costs of healthcare.
4. Adjustable rate mortgages – while this is the least prevalent of offenders when it comes to maintaining a mortgage, many loans are resetting and are driving the payment up to a unmanageable plateau for many home owners.
It’s discouraging to know that out of these four reasons, that can be worked on with banks and real estate professionals, over 40% of Americans simply give up every month and allow the banks to foreclose on their homes.
For homeowners that cannot afford to stay in their home, or who have had a long lasting impact on their employment or income situation, a short sale is the best answer.
What does a short sale do that a foreclosure does not?
- A new mortgage can be obtained and home can be purchased within 2 years.
- A credit score will only decrease by about 50 points.
- A short sale is not reported on credit histories.
- A short sale will not challenge most security clearances or employment.
- In many cases there is less chance of a deficiency judgment on any outstanding balance.
How do you get information on a short sale, or find out about other options available to you when facing foreclosure?
As a Certified Distressed Property Expert (CDPE) I can provide you a list of resources and referral information nationwide to specialists in real estate for stopping foreclosure from happening. Please visit my website for more information or contact me at [email protected]