Be Aware The Debt of a Foreclosed Home May Follow You The Rest of Your Life
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Losing the American Dream
Most homeowners do not realize the ramifications of abandoning your home and allowing the bank to foreclose on their property. There is currently not enough information educating the consumer of the consequences they face in the future once they are back on the road to recovery.
When a homeowner decides to walk away from their American dream it can be a very upsetting and emotional time. They think that walking away from their home will alleviate their debt and financial worries. In reality, it is exactly the opposite, the debt follows them the rest of their lives.
When a homeowner applies for a loan from a home mortgage lender or bank and are approved by the financial institution they are required to pay back the loan in its entirety. The bank was gracious enough to loan the money based upon the homeowner’s debt to income ratio. They technically own your home until the debt is paid in full.
Every homeowner is required to sign a set of loan documents that allows them to purchase and take possession of the home. Within this loan package ever homeowner is required to sign a Mortgage and a Note stating the debt will pay in its entirety. This is the part the majority of homeowners do NOT understand. When you walk away or abandon your home and allow it to go through the foreclosure process, the Mortgage goes away but the Note stays with you until you die or pay the debt in full.
Where you aware your lender could garnish your wages if you foreclosed on your home?
See results without votingLender Ramifications
What does this mean to you as the homeowner? The financial institution has every right to use any means possible to collect the debt. For example, lets stay you recently foreclosed on your home but in another 3-5 years you get back on your feet, find a job, everything is heading in the right direction and suddenly your wages are being garnished or there is a freeze on your checking or savings account. You guessed it – the lender is getting repayment of their debt by garnishing your payroll check or freezing your accounts.
Most homeowners believe when they abandon their home, they are relieved of their debt but that is not the case. There are many alternatives to a foreclosure, please become educated before you make an emotional decision. Please read my articles on a Short Sale Solutions before you proceed with the foreclosure process.
Read Articles About Alternatives to Foreclosure
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A very good and informative hub and thank you for pointing it out to people,
Rb11 - It really scares me that Real Estate Agents are giving legal advice to consumers and they do not have a clear understanding of the ramifications. I give lectures every week in Michigan trying to educate the consumers and Real Estate Agents.
good information to be kept in mined by every body.
beware of short sale verbal agreements. get it in writing! my lender closed the file without notification to me or buyer. They foreclosed right before x-mas, a few days later, realtor offers cash for keys. they commited many infractions, all of which don't help to save home. THANKS HOME EQ!
rb11 2 years ago
Your 100% correct and the scary thing is a lot of agents don't know the right answer either. They tell clients to give back the keys and don't worry.
Regards..