"what You Dont Know About Foreclosure Could Cost You Much More Than Just Your Home
When youre in danger of foreclosure, what you might not realize is that you dont have just one problem you actually could have many.
Those who dont realize this and just walk away from their foreclosure are in for a real surprise. They are most likely to face even more costly and complicated problems that will unbeknownst to them come way after foreclosure.
To avoid losses now and in your future, you need to understand this important fact that most miss
Your foreclosure situation could hit you with many different punches and depending on how you take them, there is a possibility of legal, tax, mortgage, credit, financial, personal, and/or other repercussions.
For example, the financial decision to NOT keep paying your mortgage (so you dont drain your cash and other assets) will result in a legal issue if youre in a judicial foreclosure state or if there are other liens against your mortgage. Youll also have a tax and credit repercussion that need to be dealt with.
With every option you choose or strategy you try, you need to understand the likelihood and significance of impact that one choice versus another will have on you, your family, your finances, your house and its mortgage, your credit, and your legal and tax standing. Youll want to weigh how they affect one another in order to cut those losses that are most important to you.
You need to ask yourself specific questions when making decisions; such as: how much money are you willing to part with? Are you OK with letting your house go or do you want to save it at all costs? Do you need your credit or not? Can you afford a credit repair service if you choose an option that will damage your credit more than another?
A good start recognizing each piece and how they relate to one another is to first clearly understand the type of problem youre dealing with at any one time. Then, determine how it intermingles and/or may cause other issues, which can be repercussions of one choice over another. Again, the key is to weigh the importance that any possible repercussion has on you personally, financially, credit-wise, etc.
The following is a general sequence of events to illustrate how you need to keep the problems and therefore decisions in their proper perspective, and understand the entirety of whats going on when choosing options to avoid foreclosure:
At first, when youre trying to renegotiate or adjust your loan with the bank so you can afford your payments (i.e. modify or refinance your loan), you have a mortgage problem.
If that didnt work and youre trying to sell your house to avoid foreclosure, you now have a real estate problem.
If you cant sell your house on the traditional market (probably because it wont sell for what you owe and you cant/dont want to write a check to the bank for the difference) then you might try to short sell. Short sell is actually not only a real estate challenge; its success mostly relies on how clearly you see that you have a banking problem with this strategy. You, or someone acting on your behalf, must be able to skillfully negotiate with the bank to accept an offer that is less that what you owe.
If you succeed in a short sale (or you end up foreclosing), then you will have issues to resolve with the IRS. So now you have a tax problem.
If after you short sale or foreclose, youre served with a lawsuit from one of the liens or creditors that you still may owe (such as the second mortgage or homeowner association fees), now you have a legal problem. The decisions you make at this point become more complex and result in your either losing more cash or jeopardizing your ownership in other property or assets.
Again, to be successful in avoiding foreclosure, or at least avoiding the most loss possible, you must understand with each strategy what kind of problem youre really dealing with, and what the implications are from every angle foreclosure can affect you legal, tax, mortgage, financial, credit, and personal. A shining example is if you dont realize short sale is mostly a banking issue and try to treat it like a traditional real estate transaction (like 75% of the realtors do) then you likely wont be successful at short sell; and therefore suffer the many repercussions of foreclosure.
For over a year, I worked with all of the experts you need on your side when youre in danger of foreclosure. They are - top attorneys, CPAs, senior mortgage advisors, short sale specialists (one of the best in the country), realtors who are experienced in foreclosure postponement, financial and credit experts, and even a licensed professional counselor - and I can confidently give you this advice:
Dont take advice from just one expert. Instead, surround yourself with a team of top experts so they can guide you in dealing with the impact(s) that one decision versus another could have on your life, both during and after foreclosure.
Find out more: www.surviveyourforeclosure.com
by: Elin M Bullmann