Foreclosure Help Blog

Foreclosure: Facts and Fiction

How many times have other people told you certain things which just weren’t true?  You may have even believed them for some time, because they said it so convincingly.  But after doing some research of your own, you realized they were completely wrong.  It could have been about anything: who won the World Series in 1988, who the 25th president was, that it is for sure going to rain out today.  Unfortunately this also applies to many misconceptions regarding dealing with foreclosure.

Misconceptions can make homeowners facing foreclosure take the wrong actions.  When you are trying to fight foreclosure, you know every minute counts, so you don’t want to get some sort of misinformation, causing you to go in the wrong direction.  You don’t want to end up loosing your home, because you took some bad advice and didn’t do any of your own research.  Here are a few myths surrounding foreclosure.

The bank wants your home foreclosed on because they want to resell it.
This is just not true; the bank would like to avoid foreclosure as much as you.  The more foreclosures on the bank’s books, the worse it is for them.  Also, when they foreclose on you they have to take care of your property and try to sell it, which means time and money for them.  Most lenders will try and help you out, if you go and talk to them right away when facing financial difficulties.

Right when you receive a foreclosure notice, you most start packing and move out.
Depending on what US state you live in, the foreclosure process can take several months.  But that does not mean delay in looking for a new place; get on it right away, because you will be removed from the property at some point.

When you are in Foreclosure, no bank will refinance your mortgage.
This may not be true; if you have lived in a house for some time you may have equity built up, you may be able to refinance easily.  Or if you have good standing credit you may be able to get a loan modification.

Filing bankruptcy will always save your house.
Filing for chapter 7 bankruptcy will only temporarily save it.  It is basically a way to buy you some time, while figuring out what to do next.

The bank has your house now so you don’t have to worry about it.
If there is a deficiency you can still owe the difference, along with any interest that occurred.  This is true even when you no longer own the home.

Once your house is gone you can never buy it back.
Some states have redemption rights where you can buy the house back, if you can pay the bank off in full, within a certain time period.

The bank owns all the stuff in your house, when they foreclose on you.
This isn’t true, if you can carry it away with you, then it is yours.  You get to keep all of your personal property, but any permanent attachments to the house should stay.  Don’t make this a huge issue, by trying to take everything possible — it will be more trouble then it is worth.

So do your research before believing everything you hear; even if you read something that sounds questionable, talk to a few knowledgeable professional about it, such as a real estate agent, or foreclosure lawyer.  It is important to gather as much information as you can about the foreclosure process, but it is even more important to know which information is correct.