Debt and Bankruptcy
Debt Collection
Money Management

Two mortgages and foreclosure?

User Avatar
Wiki User
2012-04-14 14:55:04

If you allow your home to be foreclosed or if you sign a

Deed-in-Lieu of Foreclosure. Home owners will take a hit of about

250 points on their FICO score. This means if a their FICO score

before foreclosure was 680, it could dip as low as 430. A home

owner who wants to buy another home after foreclosure will end up

waiting about 24 months before a lender will offer any kind of

interest rate that makes sense. During that time you must have a

near perfect credit.

The affect of a short sale on a home owner's credit report is

much less damaging. The negative on credit may show up as a

pre-foreclosure in redemption status, which will result in a loss

of around 80 points from the FICO score. It can also simply show up

as the loan was paid off and not affect your score at all. This

means a short sale with a previous FICO of 680 could possibly see

it fall to around 600 or it could remain the same.

There are actually companies that will work with you for free to

buy your mortgage away from your mortgage company and avoid your

foreclosure. I would advise looking into this first.

Copyright © 2020 Multiply Media, LLC. All Rights Reserved. The material on this site can not be reproduced, distributed, transmitted, cached or otherwise used, except with prior written permission of Multiply.