Understanding The True Cost Of A Foreclosure
When a bank or other lender moves to foreclose on a home mortgage, they simply repossess the home, evict the borrower and that is that, correct? While many people assume that this is all there is to foreclosure, this simply is not true. A 2007 report to the U.S. Senate Joint Economic Committee found that on average, a home foreclosure will end up costing a total of $79,443. This economic toll is not carried by any lone party; instead, it is spread out among several different entities. The homeowner loses $7,200 in expenses for moving and loss of whatever small amount of equity he or she may have in the property.
The local government is expected to lose $19,229 in missed tax revenues for that individual property, in addition to the fact that overall tax revenues will decrease given that any foreclosure has a depressing effect on surrounding home values. This effect also means that the owners of the adjacent properties will lose a combined $3,016 in decreased property values. The biggest loser in foreclosure is actually the lender, which on average gives up $50,000 in the form of legal fees involved in carrying out the foreclosure, as well as lost revenues while the loan is in default and while the property is waiting to be sold to a new buyer.
Even if you do not stand to lose as much as the bank in the initial aftermath of a foreclosure, it is important to also take into account how much it could cost you in the months and years following the event. A foreclosure can have a devastating effect on your personal credit score, depending on factors including how long you have been in default and what your score was to begin with. According to the company which developed the FICO credit reporting scores, your own score may drop as much as 110 points when you are 30 days late on your mortgage, 135 points when you are 90 days late, and 160 points when the property is finally foreclosed. As a result, you can expect to be paying significantly more in interest if you need to take out a loan to buy a new car or if you apply for a credit card, and it may also make it more difficult for you to be approved on a rental application. After a few years, the foreclosure will no longer appear on your credit report, and you can also take actions to improve your score, but life may be more difficult in the meantime.
Overcoming The Emotional Toll Of A Foreclosure
Looking for an attorney for foreclosure in Cook County? At Whiteman Law, we understand that your home foreclosure is about more than just the money. If you have been living in the property for many years, you most likely have many cherished memories that are closely tied to the home, while if you have only been there a short time you may have been working to build a life and looking forward to a long and happy future there. Now, you are faced with the prospect of having to uproot your life, pack your belongings and in all likelihood, you will have to spend the next few years renting before you are able to get approved for another loan to purchase a home of your own.
Obtaining Help From Whiteman Law
Don’t hesitate to contact us now for a free consultation where you can tell your story, discuss your concerns and find out about your options. Depending on the circumstances of the case, our firm may be able to help you prevent the foreclosure and put you in a position where you can afford to keep the house. Even if this is not possible, we can still seek to help you delay the foreclosure significantly, as well as using one of many strategies for mitigating the damage to your credit score and your financial stability. Let us guide you through this challenging experience!