More than 95% of the mortgage holders in default, don't defend themselves against foreclosure.
Homeowners across the U.S. are suffering needlessly from the excessive and long-term damages resulting from foreclosure.
What purpose does Foreclosure serve?
Foreclosure is a legal process used by lenders to recover their loan collateral so that it can be liquidated to pay off the remaining balance on a mortgage in default.
These unpaid loans are very unattractive to potential investors who use a lender's balance sheet to evaluate their performance over time.
Mortgage lenders prefer an alternative to foreclosure.
Mortgage lenders would prefer an alternative to foreclosure if it's at all possible. Their goal is to clear up the unpaid debt through most efficient manner possible. Selling a repossessed home is not an efficient process. Repairs have to be made and the house has to be marketed. Mortgage lenders do not specialize in either of these areas.
The lender's protection.
When a loan defaults, the lender collects the entire balance of the original mortgage through insurance that the homeowner often pays for. Lenders don't rely on foreclosure to protect their profit margins, only the appearance of their balance sheet.
Why don't more homeowners defend themselves against foreclosure?
Homeowners are often overwhelmed.
Homeowners are often overwhelmed by the circumstances that caused them to fall behind on their mortgage payments. Many homeowners don't even consider the fact they can stop foreclosure if they know they can't pay the past due amount or keep up with the future payments needed to stay in their house. Often times, they accept the fact that they are going to lose their home, without considering the additional penalties that accompany foreclosure. They are too busy dealing with the problem that resulted in foreclosure to deal with the foreclosure itself. A problem property can be emotionally as well as financially draining to the homeowner. Battling both problems at once can be too difficult of a task for the homeowner.
Homeowners don't know that they can stop foreclosure.
What homeowners often don't realize is that they can stop foreclosure by finding an alternative way to satisfy the balance of their home loan.
Mortgage lenders know that they are other ways the homeowner can satisfy the unpaid balance, but the homeowner cuts off communication with their lender after they miss their first payment. Once the courts are involved, the bank is no longer permitted to talk to the homeowner in default directly. Its a classic breakdown in communication that allows so many homes to be foreclosed on.
Continue on in this website to learn more about the damage a foreclosure can cause for homeowners.
Your credit score in 2024
Now more than ever
Now more than ever, your credit score is critical to your financial credibility. Your credit score isn't just used to approve loans. Today your credit score can affect your career opportunities. Your career advancement is also dictated by your credit score. Your ability to rent an apartment or an automobile. Low interest credit cards and loans are only available to those with a credit score above a specific number that separates the high risk from low-risk borrowers.
Impacting every aspect of your life
In 2023 a parent's credit score was used to determine who would start at third base for the local little league team. The American credit rating system is unforgiving, far reaching and often flawed. You must constantly monitor your credit score to avoid deductions that you're not responsible for. The deductions you do own, will impact your credit score for seven years. None are more damaging than foreclosure.