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Oct 05

5 Major Foreclosure Myths Debunked

Top Foreclosure Myths DebunkedForeclosure can be one of the most disheartening events a homeowner can experience. However, many foreclosures could have easily been prevented if homeowners knew the truth behind some of the top foreclosure myths that circulate the housing industry. We’re going to dive into the top 5 major foreclosure myths that will help you clearly understand what foreclosure is all about and what it is not.

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Foreclosure Myth #1: I will never be able to buy a house again once I get foreclosed on.

This myth takes the number one spot. While it is understandable that your credit score will drop if your home is foreclosed, the possibility of buying a new home is not out of reach to homeowners that have gone through foreclosure.

Important!

FACT: When your home is foreclosed on, you typically lose about 100-150 points from your credit score. Focus on improving your credit score by settling old debts, paying off high-interest credit cards, and making timely payments with the accounts you have in good standing.  Maximizing your efforts in the credit score improvement process will give you the fighting chance to get approved for future home purchases.

In our next article, we will share with you 10 Credit Score Improvement Strategies to help boost your credit score.

 

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Foreclosure Myth #2: I can stop my mortgage payments to get immediate financial assistance.

This one while it may seem like a no-brainer myth, you will be surprised how many people hear this type of advice from family members, friends and even some misinformed professionals. Stopping your mortgage payments will only worsen your situation.

Important!

FACT: If you’re going to stop making payments, you should look into contacting a foreclosure defense attorney right away.  They can help you understand what your options are and since every homeowner is unique, you will be provided with guidance that fits your situation.  Don’t try to purposefully stop making payments just to wait for a check in the mail, it won’t happen.

If you completely stop your mortgage payments, here’s an overview of the foreclosure process you can expect to experience.

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Foreclosure Myth #3: I will lose my house if I’m late on my next monthly mortgage payment.

Here we have another myth that definitely has made its way around to the ears of many homeowners.

Important!

FACT: If you are not able to timely pay your monthly mortgage payments, contacting your bank immediately will help solve the problem. The goal is to never be late on your mortgage payments, however if you believe you may have a late payment happening don’t leave your mortgage company out of the loop.  Letting your lender know that there may be a late payment happening, due to unforeseen circumstances will not only help you establish a good line of communication with your lender, but they may even waive late fees and penalties because you made it a point to let them know.

However, if you find yourself in need of a loan modification because you’re not able to make your mortgage payments are you are in the foreclosure process, then it is recommended you get legal representation so you don’t get lost in the loan modification system.  There are many foreclosure defense and loan modification firms that exist and we recommend checking out their loan modification case results and testimonials so you can see what people are really saying about their experience with those firms.

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Foreclosure Myth #4: My lender isn’t responding to my correspondence, I’ll just give up and stay in my house they probably forgot about me.

This is another BIG foreclosure myth that can end up causing you more grief than relief.

Important!

FACT: There may be legitimate reasons why a lender does not respond to you. Maybe they’re too busy with the current call volumes to their call center.  Possibly, that fax you sent in might not have truly reached their office. Whatever the reason is, you should never give up your communication efforts. Keep contacting and making arrangements until you reach a satisfactory result with your lender.

When all else fails, the next call you make should be to a foreclosure defense firm.  Remember, to a lender you are just the homeowner, they realize you might not be aware of your legal rights as a homeowner.  They may and have been known to take advantage of homeowners by using these exact stall tactics.  Instead of cutting all communication and hoping they forgot about you, you need to take a step in the legal representation direction.  You’ll see just how quickly they will respond once you have an attorney working with you.

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Foreclosure Myth #5: I received what I think is a great loan modification offer in the mail that guarantees I’ll get my loan modified fast!

Unfortunately, many unscrupulous individuals are trying to take advantage of homeowners in distress by offering unrealistic expectations when it comes to loan modifications.

Important!

FACT: Loan modification companies can NEVER guarantee a specific outcome or timeline for your foreclosure loan modification without having reviewed your specific situation.  While we understand homeowners are ready to jump in and take the leap hoping the loan modification guarantee is legit, the best guarantee they get is that they end up losing their home and their money.

Homeowners are not in this fight alone, there are legitimate firms that represent homeowners and can help them with their loan modification.  Homeowners should do their homework and search for local firms that have experience working with their lenders and have some documented case results from past successful loan modifications.  As the homeowner, it will be your responsibility to provide the documentation necessary for the firm to proceed with your case and any delay on your part will only cause a delay in the loan modification process of your home.

While the shifts in the economy have caused many housing related stresses, you can rest assured there are many options for you if you are experiencing difficulties with your mortgage.  Don’t hesitate to ask as many questions as you need from a legal firm so you can understand your role in the foreclosure defense and loan modification process.  Many foreclosure defense firms offer interactive question and answer options on their websites and in social media sites like Facebook, where their attorneys respond to your inquiries to get you moving in the right direction.  Remember, it’s your home and you have the right to fight for it!

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