Posted On 01 Sep 2020

Foreclosure can be a pretty difficult concept to grasp. There are people and resources out there offering foreclosure services, but sometimes you have questions that you just don’t know how to ask. Well, I’m going to tackle a few questions about foreclosure that we’re all thinking but too ashamed to ask.

Can I get a new loan to avoid foreclosure?

• No, although your home may not have completed the foreclosure process your credit score has still gone down. When your home begins the foreclosure process you have missed more than 4 payments (on average). Therefore, your credit will not be substantial enough to get a new loan.
• If a lender does give you a loan it will be a high risk loan which will put you deeper in the whole in the long run.

How long does a foreclosure stay on my credit report?

• A foreclosure will be evident on your credit report for up to 7 years. In some cases the lender can arrange to have it listed on your credit report for an additional 7 years.

Can I sell my home for less than I owe on the loan before it goes into foreclosure?

• Yes, this is called a short sale. You can only begin the short sale process if it is approved by the lender.

Can I just give my house to the lender, you know, let them have it?

• Yes, if you tell the lender to just take the house back all outstanding fees and debt will still be held against you. This will still negatively impact your credit score.
• This is called a deed in lieu of foreclosure which allows you to sign the deed over to the lender. This should not be done without trying to get your lender to approve a short sale first.

If I am paying rent in a building that is going to foreclose will I be kicked out?

• No, normally the bank allows tenants to stay or they will pay the tenant to move if the property they are renting goes into foreclosure.

If my house is about to go into foreclosure should I get a lawyer?

• No, you can call your lender to have them connect you to the loss mitigation department. If you are unable to get connected to them you can call your local HUD agency for foreclosure help.
• Look for resources to help you avoid foreclosure and consider reaching out to a short sale relator.

Posted by K. Brown