A number of myths abound the Internet and elsewhere concerning the issue of foreclosure. These are a few of the most common of them all, including the facts on what is really true.
Myth # 1: The bank can throw you out as soon as you have fallen behind in payments,
Fact: No. You cannot be thrown out from your home until your property has been sold at an auction and the deeds of your home transferred and an issuance of a formal eviction is given to you.
Myth #2: Once my house is sold under foreclosure my debt is forgiven.
Fact: Not Necessarily. In most cases, your mortgage debt is wiped clean, although it does reflect negatively on your credit report. Depending on the particular foreclosure laws of your state however and the mortgage agreements which you signed, you can be responsible for any difference in the amount of money you owe as well as the price which your home is sold at.
Other than this, second mortgages or equity lines of credit debt which was secured by means of your home as credit or collateral will be completely your responsibility despite the fact that your home is gone.
Myth #3: It?s better to file bankruptcy than to have my home foreclosed on.
Fact: Not Always. Bankruptcy may even affect your credit much more than a foreclosure does.
Myth #4: Now that I?m in foreclosure, no other bank will refinance my mortgage.
Fact: Though it may be difficult to get a new mortgage, it is still possible especially if you still have enough equity in your home. About 60-70% of foreclosures are refinanced with another bank in order to get rates as well as payments which can be handled.
Myth #5: If I go through foreclosure, I?ll never own a house again.
Fact: Only Sometimes. It is quite hard but nevertheless it is possible to rebuild your credit after a foreclosure and own a home once more. Certain banks will approve a loan which is more manageable within a few years, if you have saved at least 20% or more of the purchase price. You should also be prepared to pay a higher interest rate for a loan term which is much shorter.
Myth #6: When the bank forecloses on my house, they?ll also take all of my stuff.
Fact: No. The bank will be unable to take your personal belongings or any furniture in order to pay back your mortgage debt.
Myth #7: Once my house is sold at a foreclosure auction it is gone forever.
Fact: Sometimes. A number of states tend to offer a special redemption period which gives homeowners a few extra months after the sale of their homes, to pay the debt completely. This includes fees as well as interest; they can retain the property if all these have been paid.
Myth #8: I need to do everything I can to save my house from foreclosure!
Fact: NO! Sad, but true, sometimes it?s better to let the bank take your house and start over.
Myth #9: Only deadbeats lose their home to foreclosure.
Fact: Absolutely Not! There are a lot of reasons why people can?t pay their mortgages: an unexpected job loss; illness; death; and even divorce. As many as 6-7% of all homeowners lose their homes in the United States every year to foreclosure sales.
Myth #10: I can?t stop foreclosure because the bank wants my house.
Fact: Bank?s don?t want your house. They are in the business of giving out loans and making money not the business of real estate and losses. Foreclosures almost always result in lost revenue, most lenders would prefer to help you find a way to stay in your home and make your payments and by so doing avoid the hassle and expenses which are related to foreclosing.
Find More Foreclosures Articles
Source: http://www.boomerding.com/foreclosures/some-myths-about-foreclosure/
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