Positive Real Estate Professionals

Foreclosures have been going on in the mortgage industry for as long as I can remember. However, it has never gotten as bad as it is now. Before we go any further, lets take a look at what a foreclosure is. Foreclosure is a legal proceeding that is brought about by the mortgagee (legal term for the mortgage lender) or any lienholder (a person, company, or entity that has a lien against the property) against the mortgagor (the legal term for the borrower or person that is responsible to pay back the note). The proceeding is meant to sever all rights to the property that the mortgagor has.

Over the last 20 years that I have spent in the financial and credit sectors, I have never seen anything this bad. That is the ugly truth to this whole thing. There is no way to paint it pretty. With that being said, there is a way to put a positive spin on what is going on and where we are heading; Life after Foreclosure.

Questions are being asked if everyone will eventually face foreclosure and to me that might be the craziest question that is out there. Foreclosure rates are higher than normal, but to be honest, I do not think that any investor or mortgage company did not see that coming. When you loosen the restraints on lending you encounter the people that can not manage from paycheck to paycheck as it is. But, because they fit into the new guidelines, then you turn around and give them the house that they want. I can sit here all day and give you reasons why foreclosures happen, but honestly, that is not going to do us any good. It is about as successful as the presidential candidates sitting there telling us why their opponent is so bad instead of telling us what they will do to bring change to the country.

Just the other day, I was counseling a potential client. She was telling me about her credit history and she mentioned to me that she had a bankruptcy and wanted to know if that was going to keep her from buying a home. After I found out that the bankruptcy was 17 years ago, I then helped her understand the effects of foreclosure and bankruptcies on people and their application for a mortgage. This post will deal with the foreclosure side of it.

Several months ago I wrote a post entitled “How to Start Over After a Foreclosure“. If you are facing foreclosure, life is not over for you as you know it. It is not a sentence to live out of your parents basement or an apartment for the rest of your life. There are options that you have and there are things that you can do to start over. I will not go into the article as you can click the link and read the article for yourself. There is a path to picking up the pieces and moving forward. In this article, it talks about rebuilding your credit. If you do not know how to get your scores back up after a foreclosure, read “How to increase your credit scores“.

Bottom line is that life after foreclosure can be whatever you want to make it. It is truly up to you to decide if you want to be a home owner again or just a renter. I will say this. Home ownership is not for everyone no matter what anyone tells you. It is crazy to think that you can buy a house today and sell it next year for a profit. That is one of the issues that got us here today. Home ownership needs to get back to a commitment like it was 30 to 50 years ago. When I got into the mortgage business, home owners refinanced at a rate of every 30 months. Today, we need for that number to be driven up to 60 or higher. This is the same commitment period that a person that is buying should think about when buying a home. Also, a great rule of thumb is to make sure that you can afford this payment for those five years if you are faced with financial issues.