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  • Worried About Credit?

    Foreclosure Ramifications

    What are the True Costs Involved with a DFW Foreclosure?

    Before diving into the effects on credit, consider the big picture of what happens when a lender moves forward and forecloses on a home. They foreclose, then take possession of the home attached to a mortgage, but this is not as simple as just repossessing the home, evicting the mortgage holder and tying it up in a nice, neat bow. While some people think that this could be all that goes into completing a foreclosure, it just is not the truth. There are literally people within just mere miles of your right at this moment who are nervous that a sheriff will show up at their home to throw them out, even though they have not received a notice of their home even entering the foreclosure process. One report in 2007 performed by the Joint Economic Committee of the United State Senate came to the conclusion that an average home foreclosure could costs upwards of more than $75,000…coming in at a whopping $79,443. The impact of this $79,443 average foreclosure cost gets spread out between multiple entities. Homeowners typically lose about $7,200 in moving expenses and other losses related to the foreclosure, such as loss of equity built up in the home.

    Local municipalities and county governments are expected to forfeit $19,229 in property tax revenues associated with the property that is foreclosed, along with overall tax revenues that decrease and cause a ripple and even domino effect in the surrounding neighborhood as a whole. Causing a sinking of surrounding property values in many neighborhoods is an unfortunate common occurrence. This also translates into owners of neighboring properties losing an aggregate of $3,016 worth of property values.

    And ultimately the biggest financial loser with regards to a foreclosed property is the bank, who loses around $50,000 worth of legal fees, lost monthly mortgage revenues, and loss of principle when sold to a new buyer at foreclosure sale or in subsequent time as they liquidate the property out of their real estate owned department.

    Even for borrowers who are not in a position to lose as much actual money as the lender immediately following a foreclosure, one must also consider the eventual cost that a homeowner faces in subsequent months, years, and even decades after the foreclosure. A foreclosure devastates a credit score in many cases, depending whether the loan was already in default. The pre-foreclosure score also factors into the damage to a borrower’s credit. According to the inventor of the FICO credit score, credit bureaus’ credit scores can fall by 110 points when from being 30 days past due on mortgage payments, 135 points after becoming 90 days past due, and a whopping 160 points after the home is ultimately foreclosed. A borrower can therefore expect a significant financial hit to their cost of credit in coming months and years in the form of higher interest rates, more time needed to pay off loans, and in some cases, the inability to obtain credit at all, which can significantly hamper a person’s ability to obtain and keep employment. For those who apply to get credit cards, the rejection can become all too familiar. Significant increases in difficulty to receive approvals for rental cars, apartment rentals, and more can also be expected. Once many months or years have passed, foreclosure’s effects begin to fade and actions can be made to improve a credit score even right away following a foreclosure, yet finances can become much more difficult during this time.

    Overcoming Emotional Effects From Foreclosure

    If you’re seeking a foreclosure attorney in the DFW area, you will find At Bright Law Firm, that we understand and seek to help our clients in the way that best suits their situation. We always want to make sure that any option we choose to help the client actually provides relief. Stopping home foreclosure involves significantly more than simply money. This is your home we’re talking about. For those who have lived for years and even decades in a home, there are cherished memories which have close ties to a home. And for those only living a short period of time in a home, the long build up leading to the purchase, the down payment, and the blood sweat and tears that came together to put you in the home were meant to point you toward a happy and enduring future in the home. Yet you find yourself faced square in the eyes with the prospects of being forced to pick up your life, pack all of your things, and spend subsequent years renting instead of owning a home. Some period of time must come and go before you’ll likely be approved to purchase another home that you can call your own.

    Getting Help from a Dallas Foreclosure Defense Lawyer

    We urge you not to hesitate in contacting us now to receive your personalized, free foreclosure review in which we want to hear and understand your story, consult with your regarding your best options, and make sure we understand any concerns that you have regarding your home. If your circumstances point to keeping your home, we will do all in our power to help you with this goal, and if it is simply looking like keeping the home is out of your current financial reach, we will talk candidly and also do our best to help you have the best possible transition from being in your home to moving on. Dallas foreclosure defense attorney Richard Weaver of the Bright Law Firm may be in a position to assist you in stopping a current foreclosure or preventing a looming foreclosure. We are committed to doing all in our power to help you afford your current home. While we cannot wave a magic wand, we’ll do everything we can to help you keep the home. If income or health do not make this possible, Bright Law Firm will still do all in our power to assist you in delaying the eventual foreclosure significantly, such as through a chapter 7 bankruptcy as well as to mitigate the financial and credit score damage. Let us do our best to assist, consult, and guide you in this challenging time!