Looking for Foreclosure Homes?

Foreclosure Victims – How it happens and What Happens Next

Foreclosure victims are created because of bad credit scores, no credit scores or just plain ignorance. Most of the terminology in mortgage documentation is understood only by those who created it. Future foreclosure victims do not have the wherewithal to understand the negative connotations in these documents.

What is worse is that many immigrants are now rising as foreclosure victims because of the inability to grasp the basis of the mortgage documents. Unfortunately, when you do not have credit or seek to re-establish your credit, you will take the loans that are available to you because they look and sound good.

Who wouldn’t sign a 3.5% interest ARM for 30 years? The sad truth is, though that future foreclosure victim signed a great deal three or four years ago, it’s not much of a deal now. Instead of paying $750.00/month, you are now paying almost $1,500/month. Your payments doubled but your paycheck didn’t.

Also, there’s the “keeping up with the neighbor’s” mentality that some foreclosure victims are stuck with. They have no concern with how their mortgage will get paid or if it will get paid as long as they have the latest toys that their neighbors or other family members do.

An example is purchasing a house that is way out of your price league so that your sibling’s home looks tiny; or a future foreclosure victim buying a new car every year because Jack Smith next door does. These are not good financial practices and unfortunately the foreclosure victim is opening himself up to a world of hurt in these instances.

The true facts in this case are that the banks are ill equipped to handle an influx of foreclosed homes. The homes are devalued considerably because of new more modern homes being built in the area. Suddenly, you’re selling a house that you owe more on that it’s worth. There is little opportunity to sell the home outright, make the repayment to the bank and still have money in your pocket.

This is a set up for a downfall by all of the parties involved. Foreclosure victims need to know the rules before they sign the paperwork. They should ask questions if they do not understand the mortgage process or the foreclosure process. Don’t act stupid.

The final straw may have just been lifted for foreclosure victims. Up until recently foreclosure victims were forced to pay the taxes on the “proceeds” of their foreclosure. How can there be proceeds? Here’s how it works, foreclosure victim, Sam, has lost his home. His mortgage payments almost tripled in the ten years that he has lived there with his wife and three children.

Sadly though, his employer couldn’t keep increasing his salary to help Sam keep his home. The outstanding balance after ten years was $140,000.00. When the home went up for foreclosure auction, it sold for $125,000.00.

Sam now must move out of his home, find a new place to live and come up with taxes to pay the $15,000.00 savings on the sale of his home. Fortunately, the government is stepping in to help foreclosure victims with taxes that may be associated with the sale of their foreclosed home.

What can foreclosure victims do to recover? Once you have lost your home there is little left to do but move on. Now Sam, the foreclosure victim, is protected by the government who sees his predicament and passed a tax law that prevents the IRS from making things worse. Sam can move forward with his life and begin to rebuild using better financial practices and the knowledge he gained from this experience.

Search Foreclosed Homes by Top States

4 Responses to “Foreclosure Victims – How it happens and What Happens Next”

  1. what happens to a property when it goes into foreclosure and is not bought by any one?

  2. after the property is forclosed can you have bank accounts or will the irs monitor or take money

  3. [...] General’s Office whereby in sum total, a figure of $7.5 million will be given back to the victims of home foreclosure. Eligible customers who held their mortgages with the firm will be offered up to $2,500 per loan in [...]

  4. [...] How it happens – Learn here how foreclosure happens and what happens after the process. [...]

Discussion Area - Leave a Comment