Find Out The Effects of Foreclosure on Your Credit Report.

By
Real Estate Agent with RE/MAX Preferred Realty Ltd.

In case there is a foreclosure situation in your locality, you must know what effects foreclosure can have on your credit report. Foreclosure activity usually starts off within 3-4 months after a homeowner has defaulted on his payments. In case the lender is able to foreclose a property and get it sold in an auction at a price that is lower than what the homeowner needs to repay, then the lender can ask the homeowner for deficiency judgment. This deficiency judgment will reflect on the homeowner’s credit report.

Another impact that the foreclosure can have on the credit report of the homeowner is that the amount which was not retrieved by the foreclosure sale activity will be taken as a forgiven debt. This will be treated like income, wherein the homeowner will have to bear the income tax on this amount. In such a situation, the homeowner can always take advice from a professional tax advisor.

Foreclosure makes your credit score dip heavily. Bad credit will make it difficult for you to buy a home in the future. In order to avoid foreclosure on your property, you must make timely payments on your mortgage and loans to be safe.




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Tags:
foreclosure
credit report
judgment
homeowner
tax advisor
mortgage
windsor
canada

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Ambassador
1,390,350
Tammy Lankford
Your Lake Sinclair Expert (706-485-9668)
Lane Realty

I had no idea the forgiven debt would be treated as income by the IRS... holy cow.

December 25, 2008 07:39 PM
Rainmaker
690,588
Ann Hayden
SelectAnn.com
Prudential Select Properties-St. Louis Missouri

Sasha,

In Missouri, it can take as little as 45 days to go to foreclosure. 
This is an excellent article.

Thank you for sharing,

Ann

July 04, 2009 09:16 AM
Rainmaker
317,938
Gerry Khatchikian
ASA, TRC, SFR

Sash,

I learned something new just like Tammy.  Thanks for the info.

Gerry's AR signature

July 23, 2009 11:58 AM
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Rainer
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Sasha Miletic - Windsor Real Estate

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