Foreclosure: The Last Option

Foreclosure: The Last Option

Especially in today’s economy there are many reasons outside of a person control that could cause economic stress.  There is no way to be 100% sure you will stay safe from foreclosure on your home.  Situations such as illness, job loss, or a major accident can happen to anyone.  When one of the events happens and the financial situation is hard, it is tempting to just give up and let your home foreclose and try to walk away from it. This is the time when it’s most important to not give up and be aware of the options available.

Of all Options, Foreclosure is the worst:

The end result of foreclosure is the lender takes your house and you need to find a new place to live. However, this is not the end of it. The lender could come to you for any cost occurred in the foreclosure process.  Also, not only will your credit report take a major hit, but it will stay on your record for many years.  This will make it very difficult for you to obtain any type of credit for a long time.  There is absolutely no upside to foreclosure and it should be avoided at all cost.

Foreclosure is unavoidable? Try a Short Sale:

When the situation arises that financial problems are pushing towards foreclosure, a short sale can be a very helpful option. In the case of a short sale you would sell your home for much less that what you owe the lender.  This option should be approached as soon as you realize that you are falling behind on payments and foreclosure is a possibility.

The biggest problem with short sales is the paperwork involved and getting the lenders to agree with it.  There are steps and procedures that should be taken that can make it more appealing to the lender to pursue a short sale rather than trying to foreclose on the home.  For this reason it’s beneficial to bring in a professional.  Any real estate agent can handle you short sale. However, it is important to find one that has had a lot of experience with short sales.  There are negotiations and methods that an experienced agent can utilize getting you out of your home in the best possible circumstance.

Short sales still have their drawbacks. The process can take a long time and it still puts a hit on your credit report. Keep in mind though, that any option is better than a foreclosure. If you are able to hold on to some credit cards you will be able to rebuild your credit a lot faster and get your life back sooner with a short sale.