What Happens Next? The Impact After Foreclosure?
After a foreclosure sale at auction, the new owner will take possession of the property. If the sale proceeds cover the entire balance of the outstanding debt, including any associated fees and penalties, the foreclosure process will end there.
However, if the sale proceeds are not enough to cover the outstanding debt, the lender may pursue a deficiency judgment against the borrower for the remaining balance. This means that the borrower will still be liable for the difference between the sale price and the outstanding debt.
Foreclosure has a significant impact on the borrower’s credit score. A foreclosure will remain on a borrower’s credit report for up to seven years, making it difficult to obtain credit or loans in the future. Other consequences, such as eviction and damage to the borrower’s reputation may ensue. Eviction can be a lengthy and traumatizing process, and may involve court proceedings and legal fees. Damage to the borrower’s reputation can also make it difficult to obtain future employment or housing.
It’s important for borrowers to understand the potential consequences of foreclosure and to explore all available options for avoiding it. This may include loan modification, bankruptcy, forbearance, refinancing, short sale, or deed in lieu of foreclosure. In some cases, selling the property before foreclosure can be the best option for minimizing the impact on the borrower’s credit score and avoiding the negative consequences of foreclosure.
If you’re struggling with your mortgage payments and fear that foreclosure is looming, it’s important to take action as soon immediately. Contact us today to explore your options and discover how we can provide foreclosure information, offer foreclosure help, and provide foreclosure assistance to help you avoid the negative consequences of foreclosure.