How long is the foreclosure process if I have already modified my mortgage once?

by oliver on September 30, 2010

Question:

How long is the foreclosure process if I have already modified my mortgage once?

I modified my mortgage a few months ago and still struggling. I owe $315 and it’s worth about $200. So, after thinking about it I am considering just letting it go into foreclosure. Since I have already been thru this process with them and re-negotiated my mortgage, is the foreclosure process quicker? Will they start the foreclosure process after I have missed only one payment? How long do I have to try and save money and find somewhere to live? Has anyone been thru this?

Answer:

You were able to modify your loan in order to make it current. Now you begin the whole process again, starting with the time you miss your payments, sent a default notice, pre-foreclosure, foreclosure sale and eviction. Usually, this would take months in order to process but if you want to expedite the case, you can just move out of your house and leave the keys there. Tell the bank that you are no longer capable of paying your mortgage and want that your house be foreclosed on.

However easy you think this process is, it will give grave negative effects to your credit rating, and more importantly to your life as a whole. Once the foreclosure is complete, it will stay in your credit record for a period of seven years. Your credit score will be lowered by 200 to 300 points, affecting all the applications that you make. If you want to get a car or new mortgage, you would not be qualified because of your rating. If you lose your job, you may also find it hard to find another because of your record. Your car insurance will definitely increase as well as the interest rate of your credit card. You might not even buy a house unless you are able to give at least 20% of down payment.

As a solution, talk to your lender and let him agree on a short sale. Through this, you will be able to sell your house at a fair market value and avoid the process of foreclosure.

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