How Foreclosure Destroys Credit
A recent article by Roz Burton-Torres briefly outlines the problem with allowing a house to go to foreclosure. At Westwind Real Estate Services, we work with homeowners who are in default with negative equity. We offer to purchase the property, work directly with their lender to stop the foreclosure and help lessen the impact on their credit. The following is the article from the Seattle Real Estate Examiner.
September 15, Seattle Real Estate Examiner, Roz Burton-Torres
Do you know two of the most damaging things that could show up in your credit report when you are applying for credit? I’m sure you know that a bankruptcy is very damaging to your credit. But even worse is to allow your house to be foreclosed. If you intend to buy a house in the future, a foreclosure could take away this option for many years.
First, your FICO score will be reduced to a very low number and will stay low for years. This means that you will not receive the best credit offers, and may not be able to get any credit at all. In addition, every home loan application asks the question, “Has your house ever been foreclosed?” Once you’ve been through a foreclosure you will have to answer this question with a “Yes” (under penalty of law). This can kill any chance of you buying a house in the future. A foreclosure simply must be avoided if at all possible, even if it means selling your house and starting over.
