I should start by saying that this post is not intended to make you feel good about going through foreclosure, because I don’t think that any amount of words could do that. If you are in the midst of having your home repossessed for non-payment, it’s probably the most demoralizing experience of your life. But, there’s something you should know about foreclosure: that almost everything you know is wrong. The ins and outs of this process are vastly misunderstood and misrepresented in popular media. Hopefully, with an injection of reality, the process will seem less scary and daunting to you.
The bank doesn’t want to take your home.
Believe me, the bank doesn’t want to take your house any more than you don’t want them to do it. Banks are, after all, in the business of lending and dealing with money, not owning houses. In fact, if you keep open lines of communication with your bank - no dodging phone calls, total honesty about your situation - you may be surprised by how many programs and opportunities the bank has to work with. Foreclosure is an absolutely last-ditch action for your lender.
You can stop an active foreclosure process.
You are not a helpless sideline character in the fate of your home. Up until the point that your home goes up for public auction on the steps of the courthouse. You can refinance with another lender, you can manage to raise funds, you can work something out with the bank… the situation is far from hopeless.
They won’t immediately evict you.
If you have missed a couple of mortgage payments and your situation is starting to feel scary, know that the bank cannot evict you from your house until the foreclosure process is complete - a process that can take almost a year. And, depending on your situation, you may actually be allowed to stay in your home longer than that. Once again, open communication and honesty are key. Take this time to really evaluate your options and decide what you are going to do.
Your credit is not ruined for life, and you can eventually buy another home.
Foreclosure stays on your credit report for seven years. During that time, you can work on bettering your credit by making regular payments on your car, credit cards, and any other loans you have. Between two and four years into the foreclosure penalty phase, you may find that you have better credit than you ever did before. And yes, you will be able to buy another house - in less than seven years, even! Your mortgage will undoubtedly have a higher interest rate, but you will be able to get a home within a few years.
