Following the Right Path after the Foreclosure Trauma is Vital

November 9th, 2009 | Tags: Foreclosure

It's important to follow the right direction when you're into foreclosure

It is vital to follow the right path after facing foreclosure. Recovery can be made by swift action even after surrendering the house to foreclosure. One has not only to survive but also to thrive, said Howard Dvorkin of Consolidated Credit Counseling Services of Fort Lauderdale.

One can take off smoothly if action is taken quickly starting right from the moment of receiving the first notice saying that the bank is going to take over the property. He said, “If you’re not paying your mortgage, chances are you have extra money. Make sure you’re sticking it somewhere so you can get housing after you get the eviction notice.”

It is difficult to find rental accommodation through a rental company without a good credit card but there may be private landlords who would be more amenable. The individual landlord might be willing to take a chance by asking for an extra deposit or make another family member cosign the lease.

Freddie Mac has a programme – REO Rental Initiative that might be of help. It permits the former owners of foreclosed houses to continue to stay on as tenants in the same houses that have been repossessed by Freddie Mac. The information is available on the Internet at www.freddiemac.com. In the search box one has to type in REO Rental Initiative.

Dvorkin offered some extra proposals laced with warnings about getting back on one’s feet after the foreclosure trauma. One should introspect and look inwards trying to find out what brought about this situation. This critical self analysis will prevent a repeat occurring.

Secondly one should learn to budget – balance expenses with expenditure. Here again discipline is required to cut down on avoidable expenses. Here again there is help on the Internet by clicking on consolidatedcredit.org.

Thirdly from now on one should try not to incur heavy bills and pay them off whenever these come. This will greatly help in repairing the damage done.

Dvorkin said, “There are lenders who will give you money [after a foreclosure]. Within a month they’re offering you car loans and new credit cards. But if you ended up in foreclosure because you couldn’t control your spending, consider whether you’ll really have a sudden ability to rein that in.”

Credit damage can be repaired by making use of secured credit cards and small loans. He explained, “Over time, once you show a good record of doing that, the bank will extend you some additional credit. That is reported to the credit bureau.”

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