Credit Repair Pro Can Help Prevent Foreclosure, Minimize Credit Damage

Missing a single mortgage payment will nick your credit score, but foreclosure can send it plummeting 100 points or more. A low credit score can make it virtually impossible to obtain credit or financing of any kind, from a car loan to a charge account at Kohls. But it gets even worse. A real estate foreclosure stays on your credit report for 10 years, continuing to sully your financial reputation and branding you a credit pariah.

Adding insult to injury, mortgage lenders have the legal right to demand that lenders pay back the difference between the amount your house earns at a foreclosure sale and the balance still due on your loan (see our previous post). Since banks typically sell foreclosed homes for 10% to 20% below market value, the deficiency can add up to thousands of dollars. If your mortgage lender decides to come after you, the judgment will remain on your credit report for 7 years after the debt is fully paid, which could  extend your time in credit purgatory by years.

What financially-strapped homeowners don’t realize, say credit repair professionals, it that mortgage lenders are usually willing to work with a proactive homeowner to prevent foreclosure. Foreclosures cost banks money. If homeowners take early action, credit repair professionals can work with them and bank loss mitigators to negotiate an affordable payment plan to address arrears until the borrower is able to resume normal mortgage payments. Even if the homeowner absolutely lacks the resources to repay mortgage arrears, credit repair professionals can work with bank loss mitigators to find the least costly foreclosure procedure.

There are a number of different procedures that can help homeowners at risk of mortgage default keep their homes and minimize damage to their credit rating, including:

• Loan modification,
• Mortgage forbearance,
• Refinancing,
• Short sale and
• Deed in lieu of foreclosure.

A knowledgeable credit repair professional can examine your finances and use credit repair software to run different possible scenarios and determine which option can best protect your credit rating and keep you in your home. The bottom line is: If you’re experiencing problems meeting your mortgage payments, don’t keep putting off the inevitable. Protect yourself and your credit rating by taking proactive action – consult a credit repair professional today!