What Happens To Me When A Bank Forecloses On A Mortgage?

Is There Any Way to Avoid Foreclosure?

One way is with a deed in lieu of foreclosure. This means you turn your keys over to the bank and walk away. In return, the bank agrees not to ask you for any more money, even if the house sells for less than you owe in a foreclosure auction. Chapter 13 bankruptcy will also stop foreclosure if the court approves it and you make all payments under the plan. Another way is to refinance your mortgage with a specialty lender who will pay off your bank. This requires over 50% equity in the home.

When Will I Have to Move?

In most states, the foreclosure process usually takes a long time so you don’t have to move immediately. There will be an eviction hearing and you will be given a date to vacate the premises or be physically removed.

Will I Ever Be Able to Buy Another House?

Probably, but you won’t have another mortgage payment right away, unless of course you have a huge amount of money to make a down payment and are willing to pay high interest rates.

What Happens to My Credit Rating?

After foreclosure, the bank will file a credit report because you did not pay off your mortgage loan and your score will be lowered. It will probably take four to seven years to rebuild your credit. After that, many banks will approve mortgage loans as if the foreclosure never existed.

What Happens to Me When a Bank Forecloses on a Mortgage?

You go on with your life, rebuild your credit and try not to repeat past mistakes.

Related posts:

1. What Happens When A Bank Forecloses On A Mortgage?
2. Should I Do A Mortgage Short Sale?
3. What Happens When A Bank Forecloses On A Bad Credit Mortgage?
4. How Long Before I Can Apply For A New Home Loan With A Foreclosure?
5. How Long Is The Process For A Bank To Approve A Mortgage Loan