Generally your credit is seriously effected. You can buy a house again after about 7 years or 10 years. However, I have a 16yr mortgage background and at that time one of the examples of exceptions arose. That was when Grand Junction, Colorado had losses in the Oil business. Underwriters would ask people to prove that they had tried to sell their homes for quite a while before they gave up. They were either out of work or had to move. In these cases, as examples, the government backed mortgage chiefs allowed people to buy again at that time. Keeping tabs on your documents is very important. Be able to prove how you're handling things today and back then. Simply having chosen a bad mortgage and saying we didn't know, won't make it. It is also important to show, in the future, that other debt has been kept up so that this is not a description of your attitude toward your creditors in general. It is important to attempt not to have ANY additional dings. A medical scenario might also work in your favor. I also do short sales and these must be considered by anyone about to go into foreclosure as this can make a big difference in your credit picture and maybe even your pocket book.

Hello Sleepjam;
To answer your question, I may need to know more information. But I'll share a few things with you.

1) You may bid on your home at the sale. But do remember that you must put down a non-refundable deposit and be able to refinance the home within the time period set under the terms of the auction.

2) Once the sale is final you in all tense become like a tenant. The lein holder has the right to evict and give you a 72 hour notice to leave the property. You can talk to the realtor, that is selling the home for the bank, and ask permission to stay longer. They will grant it sometimes.

3) Monies are paid out in order of priority. 1st/taxes 2nd/1st lein holder --3rd/2nd lein holder etc... If there is any money after everyone is paid off, then the owner gets the left over money.

4)If there is still money owed it becomes an unsecured deficiency debt. The lein holder has legal rights to pursue you to collect the money.

5) If you filed a chapter 7 bankruptcy prior to the sale and received a discharge after the sale you won't owe anyone any money. Of course then you'll have a bankruptcy on your credit report.

If you need anything, feel free to contact me.

Gilda Baxter

Your question is very broad but unfortunately there isn't just one answer, and many additional questions need to be asked and answered too.

For example - is losing the home part of a bankruptcy filing, or is everything else still ok? What I mean is, are there credit cards and/or car loans that will also be written off too?

Credit scores in general have become an important part of the evaluation someone does to decide whether to loan you money to buy something else - a new car, or a washing machine maybe.

So if a home is taken back by the lender in a foreclosure, that will show up on the person's credit report to sort of warn future potential lenders that there have been problems in the past. It can stay on the report for many years. A bankruptcy or failure to pay back any other loans can also show up in this way and can mean either higher interest rates on future credit purchased, or it can mean future loans won't even be approved.

But - every situation is different, and if the foreclosure is the only bad thing on the credit report then it really isn't the end of the world, especially in these times when that has become so common in so many places. Renting should still be possible and after about three years it may even be possible to qualify to buy a new home again.

By all means, if your home is in danger of being foreclosed, talk to the lender and to other advisors also. Given the economy we're all in now, banks are more willing than ever before to try to work things out so the homeowner can stay in the home. They can reduce payments - for a time or permanently, and all sorts of other things. Do be careful of people who want to charge you a lot of money to provide what looks or sounds like a magic 'fix' though.

Lastly, if you're in this situation, don't give up hope. That's very important. There is help out there - you just need to be willing to go after it.

Hi Sleepjam,
I see you are registered as a Home Buyer on Trulia, so was it a home you were trying to buy that you lost to foreclosure, or your own personal home? If you could please reply to that question, I will be better able to answer.
Thanks,
Darrell

A lot of people feel that doing a Short Sale is a much better option then foreclosure. If it's your home, you should meet with a Realtor to discuss your options. Do make sure to interview a few Realtors. Maybe you can sell it without even going short. I Sold a house in a few weeks for $4,000 under original asking price. The Seller's were very releived, since they had interviewed another agent who told them they wouldn't get that price and that they needed to sell short. They've moved on without any negative effect on their credit reports.

Sandy Kinslow

Are you loosing your home? What happens is first the bank will notify you that you are in default of making your payments. Then I believe they notifiy that you are in foreclosure (3 months behind), after that the property goes to the sheriffs sale at which it is sold (usually the banks buy the property for what is owed on it but a person could bid higher and then be the owner), after the sheriffs sale depending on your state, in Michigan the person has 6 months to redeem the property (meaning they can pay all the fees, catch up on payments) or if it is on more than 3 acres you would have a year to redeem it. During this redemption period if you move out of the house, the bank will find it abandonded and move forward with trying to get it listed sooner, if you have it listed you can actually live in the house, keep up the utilities and not pay a house payment for the 6 to 12 months. Does this answer your question?