Losing your home to a foreclosure may not be the worse thing that could happen to you but it does come close. While many Americans continue to have difficulties making their mortgage payments and banks are forced to foreclose, the real estate market becomes saturated with foreclosed properties.
A homeowner should always try to avoid a foreclosure at all cost. A foreclosure is one of the most damaging events to your credit status and can stay on your credit report for up to 10 years. This will drastically reduce your credit score, which will prevent you from obtaining any type of loan or any loan with a competitive interest rate.
There are several reasons a homeowner may fall behind on his or her mortgage payments. Namely, a divorce, family illness, death, a job transfer, job loss, a significant income loss, adjustment in mortgage payment or unforeseen increase in living expenses. Regardless of the reason a homeowner falls behind on his or her mortgage payment, it is important to seek help immediately, preferably in the first month. Contact your lender. Explain your situation and express your willingness to cooperate. Many lenders are quite understanding and will work with you to find a temporary solution to this problem. If keeping the house is no longer an option and it is better to sell, then you also need to contact a Real Estate Specialist, especially one who is familiar with Pre-foreclosures and Short Sales.
As a Real Estate Specialist in Metro Atlanta, I have received numerous phone calls from homeowners who have called for my assistance in selling their home because they had fallen behind on their payments. Unfortunately, while I would have loved to help all of them, many had waited too long to ask for help and sometimes it was too late. Homeowners facing a foreclosure are sometimes too embarrassed to seek help, they may be uninformed as to what their options are or maybe they were just hopeful that their situation would improve and the problem would go away. As a result, many homeowners don’t often ask for help until they have received a Notice of Default from their lender and then, as a Real Estate Specialist, I have less time to sell their home or negotiate a Short Sale agreement with the lender. The reality is, lenders don’t like to foreclose. They would prefer to work with you to re-structure your loan, allowing you to keep your home. By speaking to your lender and seeking the help of a Real Estate Specialist at the first sign of trouble, many homeowners can avoid a foreclosure. By avoiding a foreclosure, you are able to resume normal borrowing relatively quickly and purchase another home when your financial status has improved.
However, if the foreclosure does take place, don’t despair. Instead, after finding new living arrangement, focus on rebuilding your life and repairing your credit. Get a copy of your credit report from all three credit bureaus – Equifax, TansUnion and Experian. Under the FACT Act amendments to the Fair Credit Reporting Act you are entitled to one free credit file disclosure in a 12 month period. To request this free annual disclosure you may contact the Central Source on-line at http://www.annualcreditreport.com/
After receiving copies of your credit report, carefully inspect all three to see what has been reported. If there are any incorrect entry, contact the respective credit bureau immediately.
Keep a check on your spending habit. Resist the urge to spend unnecessarily on consumer items.
Go to your book store, your public library or go online and start educating yourself on Re-establishing Credit.
Start putting together a financial plan. Set realistic short and long-term financial goals.
If you have a family, get the input of all family members. Be honest with your children about your situation and let them also be responsible for reducing expenses.
Finally, if you need additional assistance in making these changes, seek out the services of a professional or find a local support group.
To learn more about Pre-foreclosures and Short Sales, you may contact the author, Janice Carter, Real Estate Specialist in Metro Atlanta at thediscountagent@
404 399-9380.
