Consequences of Foreclosure
When a homeowner can no longer make payments to a lender for a home, the lender will take possession of a home through the process of foreclosure, with the purpose of reselling it, to try and recover the amount owed on the defaulted home loan. In California this process can begin if you are more than 90 days in arrears. Homeowners facing foreclosure proceedings will face lasting implications.
The Consequences of Foreclosure:
1) Your credit scores will be significantly lowered, very often by more than 300 points. This will very probably be the single most devastating mark on your credit report and will likely affect all of your future credit possibilities for years to come.
2) A foreclosure listed on your credit report is basically impossible to have repaired and will most likely remain permanently on this valuable personal report.
3) Any future application for a mortgage you apply for will require you to reveal a previous foreclosure, greatly affecting your mortgage rates, and even just your ability to get financing.
4) Did you know many potential employers will also often conduct a credit check? With a huge drop in your credit score due to a foreclosure, this may also hinder your future employment opportunities. This is especially true of many government jobs, including in the military and law enforcement.
6) In some instances a lender may still seek a deficiency judgment against you to attempt to recover the balance, in order to recuperate money they did not receive during a trustee sale or foreclosure of the property,
7) There may be ongoing tax consequences for you under a foreclosure, particularly if the property is an investment property.
8) You and your family will have to relocate. This is always a disturbance for children, marriages, careers, and other important aspects of your life.
9) Personal stigma. Often homeowners will feel a sense of failure that can stay with them for some time.