Life After Foreclosures
September 9th, 2008
What is life after foreclosures? This question becomes more poignant as each day the numbers of foreclosed houses increase leading to countless being uprooted from their homes and hearths. With the closing of the chapter on foreclosure another one opens and that is not to be found in the record books.
For the foreclosure victims the money and emotional problems are hardly over. Jay Zagorsky of Ohio State University says that despite the pain many of these people will once more become house owners again. But it will take time. Recently Fannie Mae has ruled that there must be a considerable length of time between foreclosure and the application of a new mortgage.
After the foreclosure the first problem is that of finding a new shelter. There is obviously not much money in their pockets otherwise they would not have undergone foreclosure. With a slim purse it is difficult to meet the security deposit requirements of the landlords. Sometimes the foreclosure stained applicants are asked for double the usual amount of deposit. An even bigger problem is establishing ones credibility with the landlord who now demands a credit score of about 580 before letting out the house. However if the potential tenant is backed by a good job then the landlord might overlook the foreclosure history.
Patricia Lynch of ClearPoint Financial Solutions, Richmond advises that as soon as people realize that foreclosure is inevitable they should immediately start making plans for the post foreclosure period. Thos who are insured with FHA should look for cash-for-keys programme by which they get a cheque of about $1,000 if they voluntarily leave the house leaving it sparkling clean and intact.
Once a borrower is stigmatized with the foreclosure stamp then other debtors get alarm signals and try to hike up their default rates considering the risky customer. This is especially so in the case of credit cards. It now becomes difficult to get car loans and or education loans. But if the foreclosure is an isolated case and other debts have been paid then the person has a better chance of improving his ratings. But this is a rare case because money problems rarely come alone.
Fannie Mae has stipulated that new house loans will not be advanced unless five years have been covered since the last foreclosure. But if the foreclosure has been due to a job loss then the gap has been reduced to three years. FHA insured loans are the best next alternative for those recovering for foreclosure after-shocks.
- Foreclosure Climate Changes Spirit of Competition to Cooperation Among Contractors
- Bouncing Cheques Issued by Title Companies Lead to Foreclosures
- Increase in Foreclosures Prompting Class Action Legal Suits
- Avoiding Foreclosures by Walking Away From Loans are not Without Problems
- Foreclosure Assistance Being Taken on Tour by Housing Advocate
- Washington Mutual, the Symbol of the Foreclosure Crisis, Continues to be in Trouble
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