Stop Home Foreclosure

ByMark Moss

With today’s economy, it’s becoming harder for people to maintain a good finance without having to sacrifice many other things. While other financial problems could stress you out and cause you a headache, foreclosure will definitely ruin your life to an unbelievable degree. The worst thing about it is when you get emotional and lose your logical thinking. With this, you could literally end up hurting yourself as well as your family, especially on the long run. While there are many things involved that are considered way beyond our control, acting quickly is definitely within our reaches, so why we try to play dumb?

I don’t know exactly why, but some people go voluntarily into foreclosure. I don’t know if they are just being stubborn or ignorant. The problem with foreclosure isn’t only that you’ll be hurting your actual credit rating, but it’s more about your ability to get another loan in the future. If your lender issues a foreclosure notice on your home, then you can forget to buy another home through mortgage at least for the next 5 years. If you be honest with your lender, then they will be happy to offer you alternative options that are suitable for both of you. If you’re wondering of why I insist so much on avoiding foreclosure no matter what the situation is, here are some devastating effects this problem can produce to your life:

1- Your credit rating will hit rock bottom:

The most obvious thing that will happen to you when you lose ownership of your house through foreclosure is that your credit score will drop by a substantial amount. You should expect a drop that is no less than 200 point because that’s the average drop number that foreclosure can cause. The other thing is that you will not be able to get another mortgage or loan until you get back your credit rating on the road again. For most people, it takes about 5 years to do that, so how much can you hold on.

2- You lose money:

You home is like an investment to you. Transferring ownership of your home to your lender is definitely going to make you lose all that mortgage money that you’ve been paying to them.

3- The IRS won’t leave you:

You might not believe that even the IRS will go after you when your home is being foreclosed. However, this is a fact that we need to live by today. When your lender declares their losses, the IRS will consider them as a taxable income and by that it will be a subject of payment.

4- You jeopardize your job applications:

In today’s unstable economy, employers will be looking at your credit history prior to hiring you. This is not yet very common, but there are definitely many employers who will check that your credit history is fine, otherwise, they will not accept your job application.

5- It’s not only about financial implications:

Many people think that foreclosure will only ruin your financial life. However, it probably has more personal than financial impact. If you happen to have a family, then the pressure will definitely be unsupportable, so take my advice and consider your lender’s options while you still have a chance.

Mark is a short selling expert. He teaches people the right ways to avoiding foreclosure without causing much damage. Check out: Short sale definition AND How does short sale work for more information

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