What are the consequences of a home foreclosure? Well, the biggest impact it has is you lose your house. But, if you have found another location to live, well then we get past not having a place to live once they foreclose on your home.
It definitely impacts your credit, and every late payment makes your credit score go down. So, your credit will be impacted by the number of missed payments that you’ve had. The longer the foreclosure goes on, the more it impacts your credit score.
Also, once the foreclosure is concluded, the lender has one year from the date of the foreclosure sale date to bring an action to try and collect what they call a deficiency judgment. So, you would have to wait out another year to see whether or not the lender is going to come after you.
If the lender has forgiven, or agreed not to seek a deficiency judgment, or waived that, they may send you a 1099 and you may be liable for, have to pay taxes, on the property. However, if you owned the house for two out of the past five years, then you won’t have to recognize that gain.
Also, if you want to obtain a mortgage, you are going to have to wait two to four years after the foreclosure before you are going to be eligible to obtain a mortgage from a federally insured lending institution. That is sort of a laundry list of the impacts that mortgage foreclosure has on you if your home has foreclosed.
If you have any other questions or need someone to defend you in conjunction with a mortgage foreclosure action, give me a call at 7276-847-2288. Thank you.