Foreclosures and deficiency judgments can harm credit scores for years making future
prospects of taking loans and starting life anew practically impossible. The foreclosure remains on credit history for ten years while the deficiency continues for seven years after clearing the dues totally.
However contrary to popular belief the banks are not keen to take over the property; they do not want to be landlords. Thus the borrowers should know that there are many alternatives and a deal can easily be worked out with the bank. For this the bank has a special section relating to loss. The mitigator in this section is in charge of seeing that the loss for the bank is brought down to the minimum.
The most common remedies for those threatened by foreclosure are loan modification, forbearance of the mortgage and refinancing. For this the lenders want the borrowers to submit their financial history so as to determine which option will be the best. In modification the loan terms are modified so as to ease the payment schedule. In forbearance, for the time being the borrower is excused from paying and in refinancing a new loan contract is inked.
If the borrowers fail to qualify for any of these alternatives then the banks could offer the option of short sale. It is a complex process and takes up a lot of time. But it is better for credit ratings.
The best thing would be take the help of a professional lawyer dealing with real estate to see to the proper submission of details and requirements. The important point is to make the lender agree in writing to the amount got from the short sale so that the seller is not pursued later for non-payment of balance amount.
The best is to obtain a deed-in-lieu of foreclosure. By it the borrower who is occupying the house hands over the keys to the lender and walks away. If and when the house is later sold the borrower cannot put in any claim if the amount is more than the loan due balance. Bank Foreclosures in Oregon.
Foreclosure of a house that is a home can be demoralizing but it is best to accept that even if the bank takes over the house your life will not stop. One can become a tenant. There are numerous options available. Some of the landlords are agreeable to deal with prospective tenants who cannot provide the security deposit.
Also there is professional help available for restoring credit credibility fast.