What are the Consequences of Foreclosure?

Finding a new home is a number one problem and direct fallout of the foreclosure problem. Since you don’t have cash, it can become quite a problem to get it for a rental deposit. Or you may have to shift to a lower income neighborhood. Landlords may not be quite convinced unless you have a solid employment history to rent out a place.

A foreclosure will put a bad mark on your credit report. This will pose to be a very big problem. Your credit card interest rates could jump by as much as 30%. You could even find it difficult to apply for a car loan. But if foreclosure is really an only exception in an otherwise spotless credit report, you could be back to your spotless credit report within 18-24 months.

After you have been foreclosed, it may be at least 4-5 years before you can apply for another mortgage loan to buy a home. One of the best options for obtaining a mortgage loan is federally insured FHA loan. Even for this loan, you would have to wait out for 3 years, whatever may be the cause of your foreclosure.

If the lender was unable to recover the money from the sale of your home to cover your unpaid mortgage amount, a tax bill can hit you. The IRS believes that if you aren’t paying back the money that you have taken as loan, and then it’s an income for you. However if you are insolvent, then you may not have to pay the tax bill.

The emotional toll and the stigma of foreclosure on the families are hard to quantify, but are actually quite real. If you have recently gone through a foreclosure and have become unemployed, the topic of foreclosure can be quite painful at the job interviews also.

Related Posts

• Rapid Jump in Homeless People Due to Foreclosures and Unemployment
• Foreclosure Wins The Battle Against Sober House
• Foreclosure: The Dangers Of Delay
• Foreclosure Fair In Merced
• Foreclosure Prompts Suicide