Important Foreclosure Facts

Why You Need to Act Quickly

One of the most important things in our lives is the ability to use credit. It’s a fact of life in the United States. Your credit history is an important factor in determining your standard of living. As important as it is, your credit history must be protected.

At any time, for reasons beyond our control, any one of us can find ourselves over-burdened with debt. It can be hard to find a way out. But the real tragedy is when the problem is ignored and just gets worse. We're sorry to say we've seen it over and over again. Homeowners watch their homes head toward foreclosure, hoping the problem will get fixed "somehow". But a foreclosure happens faster than they realize, and their home is taken away and their credit is ruined. Sometimes homeowners are too embarrassed to seek help. Please don't fall into this trap. This is no time to procrastinate. The only way to solve this problem is to take control and do something about it now, before it's too late.

How Foreclosure Destroys Credit
Do you know two of the most damaging things that could show up in your credit report when you are applying for credit? I'm sure you know that a bankruptcy is very damaging to your credit. But even worse is to allow your house to be foreclosed. If you intend to buy a house in the future, a foreclosure could take away this option for many years.

First, your FICO score will be reduced to a very low number and will stay low for years. This means that you will not receive the best credit offers, and may not be able to get any credit at all. In addition, every home loan application asks the question, "Has your house ever been foreclosed?" Once you've been through a foreclosure you will have to answer this question with a "Yes" (under penalty of law). This can kill any chance of you buying a house in the future. A foreclosure simply must be avoided if at all possible, even if it means selling your house and starting over.

Declaring Bankruptcy
The truth is, bankruptcy is the right solution for a small number of people. Bankruptcy laws are intended to help people who are so deeply in debt that there is no realistic hope of ever making their existing payments. But the decision to declare bankruptcy should never be taken lightly. Bankruptcy laws have recently become much more difficult for the debtor.

Even though bankruptcy lawyers advertise cheap bankruptcies as an easy way out, it is always very damaging to your credit, and for a long time. And depending on the type of bankruptcy, you could have a strict re-payment plan that you must follow for several years. Too many times people will declare bankruptcy because they just don't know how to solve their financial problems without killing their credit.

Will bankruptcy save your house from foreclosure?  For most people in your situation the answer is "no". Declaring bankruptcy will usually just delay the foreclosure for a short time. Your lender has been through this many times before. Their lawyers know how the system works. They can ask the court to remove your house from being included in the bankruptcy (a motion for relief from stay) and most times the court will grant the request. Then your lender will simply continue where they left off with the trustees sale. The odds are your house will still be taken back even if you declare bankruptcy.

Are you currently in Bankruptcy? If you have already declared bankruptcy and now find that you need to sell your house, we can work with you. It's very common for homeowners to declare Chapter 13 bankruptcy, thinking they will be able to save their house. And then some time later they see that their structured payments are only getting them further and further behind. If you have realized it's time to sell your house and get out of this rut, please give us a call. We understand how to work with lenders and bankruptcy trustees to get the deal done.

Bankruptcy laws are very complex. If you are considering a bankruptcy consult with a competent and trustworthy legal professional.

The Truth about a "Deed in Lieu"

If your lender has suggested you sign a Deed in Lieu of Foreclosure, make sure you understand what this will do to your credit. If you agree, your house will be given back to the lender without going through the foreclosure process. This may seem like an acceptable solution. But did you know your credit report will show that you executed a Deed in Lieu? Did you know that having a Deed in Lieu on your credit report is just about as harmful as having a full-blown foreclosure? Signing a Deed in Lieu could be a very poor decision.

Save Your Credit and get a Fresh Start

We have several tools we can use to keep you in your home, if that's what you want to do. You may have options you don't know about. Options like a loan modification, a forbearance agreement, or a refinance, to name a few.

But if you decide selling your house is your best solution we can buy it and stop your foreclosure dead in its tracks, and put money in your pocket. Either way your credit could be free of foreclosure, and that's the best position for your future. It allows you a fresh start without making your credit much worse for several years to come.

If you’re trying to decide what to do next, ask the people who give you the best chance for success. We can help to tilt the odds in your favor during this difficult time, and we would be happy to discuss your options before you take your next step. No embarrassment, just help.

Let's Get Started!

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