Foreclosures Book

A foreclosure dramatically affects your credit score. Your credit scorewill take a drop of 85 points to 160 points after a foreclosure (some sources say even more). This may affect your ability to buy another home for years to come. A foreclosure remains on your credit report for up to seven years. Your credit scores can also affect other areas of your life, such as your insurance rates, phone credit and, in some limited cases, your ability to get a job. OPTIONS AVAILABLE TO YOU There are various alternatives to foreclosure that you may be able to pursue, including loan modification, deed in lieu of foreclosure, or short sale. We will examine each of these in depth in subsequent chapters. You could be able to negotiate your way out of a foreclosure. Contact your lender as soon as you realize that you’re having serious difficulty making your payments. You might be able to negotiate a new repayment plan or even refinancing that suits your current financial status. According to Mortgage Banking magazine, low- and moderate-income borrowers who engage in repayment plans are 68% less likely to lose their homes.