What are the legal ramifications of foreclosure?

What are the legal ramifications of foreclosure?

Foreclosure is not something most people take lightly. The process is emotional, stressful and in many cases causes stress-related health problem for homeowners. However, facing foreclosure is not the end of your life. In fact, for some homeowners a foreclosure might be the best thing that can happen. It can change their lives for the better and make them look forward with a new perspective. On the other hand, a homeowner may not see it that way. Some homeowners might fight to the bitter end to save their home and others might just simply walk away. Regardless, of which situation that you find yourself in you need to know the ramifications of a foreclosure.

Homeowners who are in default on their mortgage payments or if their property value has dropped from the economic crisis can use the Strategic Default system. The Strategic Default allows you to purposely stop paying the mortgage bill each month, which in turn forces the lender to foreclose on the property. This way a homeowner can simply walk away from his/her home and never look back.

However, consult an Orlando foreclosure attorney to get a better understanding and make a plan.

Advantages

• The borrower cuts his losers
• A lender or mortgage company is more apt to work out or renegotiate a new or different loan.

Disadvantages

The advantages may move a homeowner to let the bank foreclose on the property. However, there are major disadvantages to not fight the foreclosure. The borrower’s credit score is significantly impacted when it comes to making future money transactions. Whether the homeowner wants to open a credit card, rent a car or purchase a cellular phone in the future, a foreclosure negatively impacts the ability to do so.

Also, homeowners may have certain obligations if the mortgage company doesn’t recoup all the money from the foreclosure sale. For example, the owner may have to pay the balance of what the lender doesn’t recoup. However, there are pros and cons that come with using the strategic default system.

Letting a foreclosure occur makes it harder for a homeowner to borrow money or apply for a loan. A foreclosure stays on a person’s credit report for over seven years. Another ramification is how others view the homeowner. For example, other property owners may not rent to a homeowner because of the foreclosure because it looks like the homeowner doesn’t pay their bills.

When homeowners have the choice to fight the foreclosure or let it happen, it’s important to consider all the ramifications of foreclosure.