The home foreclosure numbers continue to be frightening. According to the 12/9/09 MarketWatch article, Foreclosures could top 8 million: Credit Suisse, Credit Suisse forecasts that over 8 million mortgages (8.1 Million to be exact) will be in some form of foreclosure in the next four years. So, there seems to be no relief in sight — at least for a while.
And, when you couple this with the fact that many struggling homeowners have no savings to pull them through; no equity in their homes to tap; and bad credit that prevents them from getting any kind of loan — it leaves them in a financial pickle.
So, what exactly do you do when you have bad credit, no home equity and no savings? Here’s some concrete advice about how to get back on your financial feet.
Foreclosure Advice: Should You Even Try to Stay In Your Home?
Because foreclosure is an emotional, as well as a financial process, it can be hard to make sound decisions. But, in order to see your way out of this mess, you must somehow remove emotion from the process and consider the pros and cons of trying to hang onto your home.
Foreclosure Advice: When Foreclosure Is a Blessing in Disguise
For, “losing” your home can be the best thing that could happen — in the long run. It’s all in how you look at it. Consider this, if you don’t qualify for a mortgage modification; are under water and can’t refinance; and have bad credit, you may need to seriously consider letting your home go into foreclosure. Or, try to sell it in a short sell 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, you will hopefully make better decisions moving forward.
Foreclosure Advice for Those Who Want to Keep Their Home
If you have scarred credit, no equity and no money then your best bet is a mortgage modification. Why? Because your lender is the party with the most to lose if you walk away from your home. And, with bad credit, no other institution is going to give you a loan — so that’s out of the question.
If you have no savings, you can’t dig yourself out of a hole, ie, paying arrears or buying something cheaper.
And, with no home equity, you can’t refinance — so that’s not an option.
So again, your only true option is to try to work something out with your existing mortgage holder. There are government programs set up to help homeowners stop foreclosure. But again, if you find that you are ineligible, your best option is to hound your existing lender into giving you a mortgage modification, etc.
The best piece of foreclosure advice is probably this: The only way to get out from under a difficult situation like home foreclosure is to face facts. The sooner you do, the sooner you can make some concrete decisions and move on with your life.