If you lived through the Great Recession, you’re at least familiar with the idea of foreclosure. Back then, millions of families became intimately familiar with the process surrounding foreclosure and even now, around 250,000 families enter into foreclosure every three months. It’s a scary ordeal and it can feel daunting to watch it loom nearer on the horizon. But if you’re more sure of what to do in this scenario you can navigate it more readily. In fact, around 60% of homeowners across the nation today expressed interest in understanding their mortgage more than they do now. This is the same issue that caused the original housing bubble that sent the economy into the Great Recession. Not understanding the mortgage you took out is the thing that’s going to turn your home into an ugly house or a burden. Gain a dynamic understanding of the mortgage you signed and how foreclosure works below.
What is a Foreclosure?
A mortgage is a loan to help you afford a house. It’s the money that’s supplemented by the bank that they believe you’ll return to them over a set schedule or time. When a foreclosure occurs, it’s because the bank has not collected its due for a certain amount of time and it’s trying to reclaim the property. If the payments on the mortgage aren’t paid, the bank will try and take back the item so that they can try to recoup their losses on the property. Usually, the bank sells the house at a knockdown price and they don’t attempt to fix any of the potential issues.
What to Expect From a Foreclosure
Much like the aftermath of the housing bubble, people generally enter into foreclosure because of a drastic financial change that was unforeseen. It could be from losing a job as many had happen in the Great Recession, it could be a result of medical problems, too many debts, or even divorce. Whatever the reason might be, once you’re no longer able to make payments on the mortgage, the foreclosure will begin. After the payments halt, the loan becomes “delinquent” and then the homeowner will go into default. At that point, the default status will continue for around 90 days afterward. In general, the lender makes a considerable effort to get in touch with the borrower to try and get them to pay the balance of the loan. Once the lender determines that the loan won’t get paid back they’ll file a Notice of Foreclosure. They’ll promptly file foreclosure documents in the local court which gives the borrower around four to nine months to adjust to the time frame. Depending on the lender, they’ll attempt to help you get back on track with your mortgage.
How Foreclosure Will Affect Your Debt
Obviously, defaulting on a mortgage is much more serious than the average missed payment on a credit card. It could be upwards of $20,000 that you are forced to default, not $300. If you found yourself facing a foreclosure because of mounting debt, you’re in a real pickle. If your state allows a deficiency judgment, also known as the court forcing you to pay the remainder of the loan, then foreclosure can be astonishingly disastrous for your financial well-being. At times, it can be a fresh start for your finances. If your lender does not pursue a deficiency judgment, you’re essentially getting out of a bad investment much like making poor choices in the stock market. You’d merely sell your shares and back away before anything worse happened. The debt you might incur can be avoided by choosing an all-cash home buyer to take over the house.
The Secret To A Truly Fresh Slate
Don’t leave your financial health to the fickle leanings of a lender. Make sure that you don’t fall into further debt or become the victim of a deficiency judgment. Instead, come directly to Colorado All Cash. There’s no reason that a foreclosure should become anything more than it already is. It can be traumatic leaving a house behind, but with the support from our team of genuine people who care, we can help you. If you have any questions about the foreclosure process, we’re here to help.
Other Questions About Selling Your House to an All-Cash Home Buyer
A foreclosure, if it’s allowed to go through and be filed with the court before you come to Colorado All Cash, will ruin your current credit score. You could see a drop between 85 to 160 points on your credit score for just one foreclosure issue. To navigate a foreclosure, you should get in touch with us as soon as you suspect you will no longer be able to make the mortgage payments. Get in front of the problem as quickly and efficiently as possible. Contact us to find out more about our 24-hour quote process and how we can save you from more debt and bad credit.