Foreclosure Notice: What To Do If You Have Bad Credit, You Have No Equity, And You Have No Money
Posted On April 26, 2021
The foreclosure numbers remain staggering. According to the MarketWatch article of 12/9/09, Foreclosures could exceed 8 million: Credit SuisseCredit Suisse predicts that more than 8 million mortgages (8.1 million to be exact) will be in some form of foreclosure in the next four years. So it seems like there’s no relief in sight, at least for a while.
And, when you combine this with the fact that many struggling homeowners don’t have the savings to support them; there is no equity in their homes to take advantage of; and bad credit that prevents them from obtaining any type of loan, leaves them in a financial bind.
So what exactly do you do when you have bad credit, no home equity, and no savings? Here are some concrete tips on how to recover financially.
Foreclosure Notice: Should You Try To Stay In Your Home?
Because foreclosure is an emotional and financial process, it can be difficult to make the right decisions. But, in order to get out of this mess, you must somehow remove the emotion from the process and consider the pros and cons of trying to hold on to your home.
Foreclosure Notice: When Foreclosure Is A Blessing In Disguise
Because “losing” your home may be the best thing that could happen, in the long run. It all depends on how you look at it. Consider this, if you don’t qualify for a mortgage modification; they are under water and cannot refinance; and you have bad credit, you may need to seriously consider letting your home go into foreclosure. Either try to sell it in a short sale or do a deed in lieu of foreclosure.
Without this financial albatross around your neck, you will be able to start over. With a lesson learned, hopefully you will make better decisions in the future.
Foreclosure Tips for Those Who Want to Keep Their Home
If you have scarred credit, no equity or money, then your best option is a mortgage modification. Why? Because your lender is the party with the most to lose if you leave your home. And, with bad credit, no other institution will give you a loan, so that’s out of the question.
If you don’t have savings, you can’t get out of a hole, that is, pay arrears or buy something cheaper.
And, without a home equity, you can’t refinance, so that’s not an option.
So again, your only true option is to try to fix something with your current mortgagee. There are government programs in place to help homeowners stop foreclosure. But again, if you find out that you are not eligible, your best option is to harass your current lender into giving you a mortgage modification, etc.
The best foreclosure advice is probably this: The only way out of a difficult situation like foreclosure is to face the facts. The sooner you do this, the sooner you can make some concrete decisions and move on with your life.