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Foreclosure Facts
Think you are going to beat “the man” by letting your home foreclose? Think again. Many homeowners in Flagler County and across the country now owe more, sometimes much more, than their home is currently worth. Borrowers think that because it will likely be years before property values rise to a level that they are no longer underwater, it warrants walking away from their home. However, the long-term consequences could be bigger than first thought.
Having a foreclosure on your credit doesn’t just last 7 years, it can last forever. The original judgment may fall off of the report, but can be renewed indefinitely by your creditor. Even if it is not renewed, most credit applications ask if you have “ever” had a property foreclosed upon. Lie on that question, and you are now committing fraud, something not taken very lightly, especially in recent times. If you have security clearance of any kind and have a foreclosure, you may immediately be terminated, because at that point, you are viewed as open to taking bribes or embezzling funds because of your financial hardship. You may also be denied future employment based upon your credit report. More than a few employers want to know that you can handle your personal finances before letting you in their doors.
Okay then, what if you owe more on your mortgage than your home is currently worth and are thinking of a short-sale? That is a term that gets floated around a lot these days, but is not properly understood. Not only do you need to have your lender’s approval to sell your property this way, but you also have to prove to them that you are no longer able to make your payments. If you have not had a major life event (i.e. loss of job, divorce, etc.) you may not qualify. Even if you get your lenders approval for a short-sale, you are not off the hook. You must also get them to waive their right to a deficiency judgment, or they may seek you in the future to pay off the portion of the debt not covered in the sale.
Bankruptcy is another option that many homeowners now look at. You will want to explore this option with a bankruptcy attorney at length. If you file bankruptcy, your home will be involved in the proceedings and will not be available for a short-sale. Filing has become much harder than in the past, as your attorney can discuss with you.
The main thing to remember is that before you do anything; speak with a professional that is educated in these matters. I am a Certified Distressed Property Expert and specially trained to assist in short-sales and help homeowners avoid foreclosure and bankruptcy. If you have any questions, please call anytime: 386-986-9693.
