Find out what happens after foreclosure, so that you can prepare yourself and your family.
The current global economic crisis has had many influences that built up to the meltdown in the fourth quarter of 2008.
No small contributor was the near collapse of the housing market.
Property values that seemed to rise forever came crashing down.
Billions of dollars in home equity were suddenly gone, and liquidity was suddenly a problem.
People from all walks of life were faced with a mortgage that was no longer affordable. Foreclosures skyrocketed, and housing prices plummeted. Foreclosure was no longer something that happened to the other guy. Now it is happening to family and friends everywhere.
While foreclosure may seem like the end of the world, or at least a stalling of the American Dream, it is most certainly not. Your life, and the lives of your dependents, will go on. It is important to recognize that, and begin to prepare for what happens after foreclosure.
Foreclosures themselves have changed in the last year. What happens after foreclosure has also changed in that time. The events that follow foreclosure have varied from state to state, as local economies have tried to deal with their impact.
The federal government is also working on plans to keep homeowners in their homes. Most of these plans, however, target homeowners who have not yet come to the point of foreclosure.
Most states have a formal Redemption Period. Once you have been foreclosed, your home will be sold at auction. During the Redemption Period, you can match the winning bid and repurchase your home, assuming you can raise the money. It may be possible to stay in the home during this Redemption Period.
What happens after foreclosure at this point depends on you. If you can raise the money and repurchase your home, you are all set. If you cannot raise the money, you will have to leave. Many buyers of foreclosed homes offer foreclosed homeowners a cash payment to voluntarily leave the house intact, to prevent foreclosed owners from intentionally damaging the home. If you do not leave willingly, the sheriff will evict you. Having a foreclosure and an eviction on your record may make it very difficult to rent once you are out of the house.
If your home is a second home or investment property, foreclosure may not be bad. If it is your primary residence, make a plan for where you will live next, and leave your current home with that plan in mind.
If your home hasn't been sent to auction yet you may still have time. Look into getting a foreclosure refinance or some sort of loan modification. There are many brokers out there specializing in this due to all of the foreclosures lately.