THE AFTERMATH OF AN HOA FORECLOSURE
Some states allow a homeowner to redeem their home after a foreclosure. In other words, you can buy back your home by paying off the amount that you owe the HOA, in addition to any related interest, fees, and penalties. If the HOA made repairs to your home after the foreclosure, you may need to compensate it for the repairs. The right of redemption may last for only a few months and varies widely from state to state. You may suffer significant damage to your credit score based on an HOA foreclosure. This can affect your ability to get a loan for a home in the future and may require you to accept a higher interest rate or make a larger down payment. However, if your credit score was already low, you may suffer a less significant impact than if you had a strong credit score. Simply missing a payment, even if the HOA does not foreclose, may weaken your credit score as well if the HOA reports the missed payment to credit bureaus.
POINTS TO REMEMBER:
• Many Americans live on tight budgets and are vulnerable to a downturn in the economy, housing market, or their personal financial situations. • Situations such as a job loss, a health crisis, or other problems can create a “tipping point” that will prevent you from making timely mortgage payments, or even compel you to default on your mortgage. • If you owe more on your loan than your home is worth, your mortgage is said to be “underwater” or “upside
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