Comments on: How Foreclosure Affects Your Credit Score

By: Laura Morton

Laura Morton — Tue, 01 Jun 2010 04:59:07 +0000

Fear of what happens after foreclosure is forcing homeowners to hold onto their houses longer than they really should. If you are underwater plan your exit strategy. Can you downsize?
Consider a strategic default. This could save you thousands of dollars in mortgage payments. You could rent a similar house in the same neighborhood at a fraction of your mortgage..

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By: Grace Stuart

Grace Stuart — Thu, 01 Apr 2010 04:30:31 +0000

Homeowners experiencing foreclosure, no doubt, are in one of the most stressful events in their lives. Unfortunately, all the fear and emotion is what paralyzes most into taking the right actions. As the above article states, there are many options to consider when trying to avoid or stop foreclosure. A homeowner must educate themselves on each of their options before deciding what is most appropriate for them — whether it’s loan modification, short sale, bankruptcy, refinancing with hard money, etc. Credit repair becomes a priority only after the foreclosure has been dealt with and the homeowner is on the road to recovery. As terrible as foreclosure or bankruptcy is perceived to be, financial relief from a financial burden such as an unaffordable mortgage is a most liberating experience. After all is said and done, starting out with a blank slate is not all that bad — in fact, it feels great — as long as you’ve learned from your mistakes, of course.

By: Dave

Dave — Thu, 04 Feb 2010 19:48:09 +0000

Here is some good info on “Walking Away” and the bogus stigma the media and banks like to put on people who are considering a Strategic Default. A Strategic Default is when you can pay the mortgage, but you are underwater on the house and it just doesn’t make sense to stay in the home.

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1494467

Abstract: Despite reports that homeowners are increasingly “walking away” from their mortgages, most homeowners continue to make their payments even when they are significantly underwater. This article suggests that most homeowners choose not to strategically default as a result of two emotional forces: 1) the desire to avoid the shame and guilt of foreclosure; and 2) exaggerated anxiety over foreclosure’s perceived consequences. Moreover, these emotional constraints are actively cultivated by the government and other social control agents in order to encourage homeowners to follow social and moral norms related to the honoring of financial obligations – and to ignore market and legal norms under which strategic default might be both viable and the wisest financial decision. Norms governing homeowner behavior stand in sharp contrast to norms governing lenders, who seek to maximize profits or minimize losses irrespective of concerns of morality or social responsibility. This norm asymmetry leads to distributional inequalities in which individual homeowners shoulder a disproportionate burden from the housing collapse.

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By: Loan Modification Expert

Loan Modification Expert — Fri, 15 Jan 2010 19:31:00 +0000

Mortgage loan modification is definitely an option for many troubled home owners. You have to qualify though. Not everybody qualifies, but most people do.
You can qualify even if :

1. You have the Notice of default. You can stop your foreclosure.

2. You have the date of the Trustee Sale. You can stop the sale.

3. You have primary residence, second home, investment property, land or commercial property. ( Yes, you can modify your loan for all of these properties as well )
4. You are NOT behind your current mortgage!

There are many possible options available at this moment, so take your time and talk to a loan modification expert to see what your options are.

By: Tom

Tom — Wed, 23 Dec 2009 10:50:54 +0000

Very nice post. But Mortgage scam is nowadays a part of our society, but few understand what it means and what harm that it can cause.

By: Jonathan

Jonathan — Tue, 15 Sep 2009 18:24:36 +0000

I have been unemployed from the real estate marketing field for almost a year and a month. I have exhausted all of my savings and 401k, and am now left with nothing but what little bit of unemployment I received each week. I have been actively seeking work ever since being laid off from my job, and finally, out of desperation, accepted a job that would initially pay for two weeks of training via a temp agency, at which point the temp agency would stop payment, and I would go to commission-only with the said company.
During the second and final week of training (which, by the way, was “for [me] to see if the job is a fit for [me] and the company”), I realized this was not a position in which my financial situation I could afford to take. Virtually no one was coming in the retail establishment, and additionally, as I learned more about the way the company worked, I realized to start my own business (which is what I’d have to do) would cost more than I could afford. At that point, I informed the employer that the position was not a fit for me, thanked them, etc., etc.
The next thing I know, my employment benefits stopped. I learned that the temp agency had flagged me as “hired,” even though the payment from them was for the two weeks of training only, and for that specific position. Now I have no benefits whatsoever, and am at a complete loss as to what to do next.
I am behind on my mortgage loan payment, and even though I have been set up on a three-month deferral, I am wondering how I’m going to make even the minimum due at the first of the month. Does anyone have a recommendation on a company that would be able to help with a mortgage rate loan modification or refinance of some sort in my situation? I’ve been given the name of one particular site, http://www.help4homeowers.com which I’ve heard is a reputable company. Before taking any action or contacting any certain company, do any of you have any suggestions, similar stories, or information that may help?
Thank you!

By: Tony

Tony — Fri, 11 Sep 2009 12:10:22 +0000

Because of a vicious divorce (I was jailed AND acquitted 7 times by an extremely greedy spouse), my mortgage payments fell behind. I was eventually awarded the house (4 years later) by the courts and immediately attempted to get current with the bank. The bank instructed me to wait until it could work out a detailed plan before I paid anything.

Despite sending more than 35 registered letters, e-mails, and phone calls the bank never responded. My home was sold at auction last week for $140,000 less than the appraised value.

Going forward I will do without rather than buy anything on credit. In addition, I am assuming that if businesses really want to sell me something they will find a way.

I’ve learned two good lessons. Don’t marry greedy people. Don’t share a loan obligation with anyone.

By: Darenda

Darenda — Fri, 04 Sep 2009 13:35:20 +0000

Cassie,

Have you contacted a HUD-approved housing counseling agency? Agencies like HomeFree-USA employ HUD-certified counselors who not only are well versed in loan modification options, but also are excellent negotiators with lenders. HomeFree-USA has helped 90% of distressed homeowners who have sought help. Why not give us a try?

By: Chase

Chase — Fri, 04 Sep 2009 07:10:27 +0000

I used to work at a credit union as a marketing assistant. Everyone who works there was subject to a credit check prior to employment. The primary reason is that there is a greater possibility of theft because money is involved.

This is not really saying that because you have a bad credit score that you’re automatically a thief. You have to look at it from – in this instance – the credit union’s position. They have a fiduciary duty to secure their members’ money. There are instances that have normal, hard-working people end up in a financial bind and end up doing things that they wouldn’t normally do. Like steal, for instance.

Again, not to say that anyone with a bad score is likely to commit monetary theft (or if you work for, say, a government aerospace contractor – sell secret information) but you can see that there’s a greater chance that someone in dire financial straits would commit such a crime.

Like insurance companies that raise, say, health insurance premiums on people who have pre-existing conditions. Not to say that they will get sick and require payout in an amount far more than they’ve put in but there is a greater chance that they will.

No, I don’t think it’s fair because people are put in categories of good or bad based on some numbers. People are often more than just numbers. But do understand that businesses too have a duty to their members, employees or client to make sure that the trust put in them is secure. A credit review is an arbitrary number, yes, but until there’s a better way to judge an applicant to a sensitive position (without a lengthy, CIA-like background check – which even that is not flawless i.e. Aldrich Ames), a credit score will have to do.

1 like

By: Rockon

Rockon — Tue, 01 Sep 2009 06:58:51 +0000

Hi…
I have been negotiating with CountryWide/BoA for over a year now to do a short sale. 3 of 5 offers have fallen through because they take so long to process. (45-60 days, hence so few offers) However, they will not approve a short sale if you keep paying, so this advice in not accurate for all banks

I think it is horrible that your credit score can effect whether you get a job or not, that is hardly fair practice in many cases, the employer see the score but do not know the story behind it such as a asshole phone company or faulty medical billing causing the drop.