If a homeowner is so financially distressed they can no longer stay in their home, it’s crucial they take action to avoid foreclosure. A foreclosure negatively impacts credit scores and remains on an individual’s credit report for seven years–which can prevent them from purchasing a home within that time. The following two options are ways homeowners can avoid having a foreclosure on their credit report:
If the home is “underwater” or is valued at less than the amount left on the mortgage loan, the lender may agree to a short sale. All proceeds from the sale will go to the lender, and any remaining loan balance will be forgiven or paid back as new debt.
Homeowners who don’t want to deal with a short sale can transfer the house deed to their lender to be released from the mortgage contract. Even if the home is underwater, the lender will usually agree to forgive any remaining debt on the mortgage.
Are you facing possible foreclosure, or have you already been foreclosed on? At Casa Real Properties, our expert foreclosure real estate agents can help you explore all options–including assistance programs, lenders, and attorneys–that may help you keep your home or avoid foreclosure on your credit report.
Contact us today to speak with our experienced foreclosure real estate team.