Early Warning Signs of Foreclosures

Early Warning Signs of Foreclosures
Homeownership is a cornerstone of America that is protected, promoted and cherished. To lose a home
for any reason is devastating, but to lose it through foreclosure can also be embarrassing and
demeaning. When you are having conversations with homeowners that have mentioned foreclosure,
revisit the warning signs here.
• Credit card debt out of control. (Maxed out cards). Paying the minimum amount due.
• Paying for necessities with credit cards (groceries, utilities, etc).
• Cannot meet monthly financial obligations (choosing which bills to pay).
• Borrowing from friends and family.
• Loss of employment, or reduction in hours or wages.
• Major illness which can cause loss of work and an increase in health expenses.
• Divorce, separation or other traumatic family or personal situations.
• Death of a spouse or significant other.
• Cannot pay the new Adjusted Payment on the ARM mortgage loan.
• Major unbudgeted maintenance expense.
• Excessive debt is the number-one cause of financial collapse and foreclosure.
If you detect any of these warnings, early intervention could help save a home.

Foreclosure and Link between a Homeowner's Credit and Foreclosure

A foreclosure is a huge mark to a credit score. Under Fannie Mae guidelines, a borrower will not qualify for a loan for at least five years, and probably seven years. FICO is an abbreviation for Fair Isaac Corporation and refers to a person’s credit score based on credit history. Lenders use the number to decide if the person is likely to pay his or her bills. A credit score is usually between 300 and 850. A credit rating where the FICO score is 660 or above means there have been no late mortgage payments within a 12-month period. This is the best credit rating to have when entering into a new loan.

Avoid a Foreclosure --- A foreclosure is a catastrophic event for any property owner and has serious legal, credit and tax implications. Working with homeowners on the verge of foreclosure or in the foreclosure process is challenging for all parties involved. However, as REALTORS® we can provide expert assistance during this difficult time.

Mortgage Debt Forgiveness

Be informed!