Tweet

Rebuilding Your Credit after Foreclosure on an Underwater Mortgage

Guest post by: Bud Gragg

Article Overview: We know it sounds unbelievable, but the truth is that there is life after your underwater mortgage and there is life after foreclosure-and it's not such a bad life after all! Kristin and I know what we're talking about. After the real estate bubble “popped” in 2007, we found ourselves underwater on several mortgages. We're Realtors, after all, and we believed what the “experts” had to say about how property values would never stop rising.

Rebuilding Your Credit after Foreclosure on an Underwater Mortgage

We know it sounds unbelievable, but the truth is that there is life after your underwater mortgage and there is life after foreclosure—and it's not such a bad life after all!

Kristin and I know what we're talking about. After the real estate bubble “popped” in 2007, we found ourselves underwater on several mortgages. We're Realtors, after all, and we believed what the “experts” had to say about how property values would never stop rising.

Well, now the “experts” are telling dire tales about how you'll never get credit again if you foreclose on your underwater mortgage.

We don't know about you, but we're not getting fooled again! At least, that's what we decided when we realized that we were raping what was left of our savings to keep paying our mortgages even while our businesses were suffering.

So we took the foreclosures and here's what we found—yes, your credit will take something of a hit after foreclosure. But if you plan carefully, you'll be able to survive that hit with flying colors!

Here's what you need to do. Once you know you want to foreclose on your underwater mortgage, start planning before you miss a payment. Will you need a new car within the next 5 years? If you'll be able to keep up with the payments, get that car now.

The next things you can do are to apply for a mortgage modification OR hire a Realtor to list your house and negotiate a short sale on your house. You almost certainly won't get a mortgage modification, and there's a chance that you won't be able to sell your house in the short sale and it will end up foreclosing anyway.

Why do these things, then? Because, while you're in the application and the short sale processes, you can live in your current house payment-free! Think of all of the money you'll save on mortgage payments that you can use to start your new life.

But you'll need to do something else with that money, too—keep up with your other bills religiously. If you do that, it's more likely that your mortgage will be seen as an aberration rather than an indication that you can't be trusted with credit.

Remember—more than 2 million foreclosures have happened since 2007, and more are coming. With all of that company, just how likely do you think it is that a mortgage foreclosure alone is going to hold any of us back for very long.

Now, there is one thing you don't want to do while you're deciding what to do with your underwater mortgage and carrying through with your foreclosure. You don't want to listen to your mortgage lender. To banking institutions and their CEOs, we are only numbers on a page.

They'll tell you your life and your family's lives will be over, that you're an irresponsible deadbeat, and all sorts of other nasty things if you talk to their employees during your foreclosure! If it gets to the point that they won't stop calling you—and it probably will—scrap your land line and invest in a pre-paid cell phone to get yourself some peace of mind.

So how are Kristin and I doing after our couple of foreclosures and many short sales? Well, we're living with less stuff than we used to—but who really needs several designer watches, more than one car each, or a walk-in closet bursting full of clothes? Kristin and I have had those things and more. But you know what? Even after our underwater mortgage adventure, we still have each other. And that's more important than any numbers on a credit score.

Related Articles
  The Underwater Mortgage: What to Expect in Pre-Foreclosure-and Beyond
  Short Sale? Foreclosure? Options for the Underwater Mortgage Holder
  Need Underwater Mortgage Help? Here’s Where to Turn
  Underwater Mortgage Solutions: What Is a Short Sale?
  Underwater Mortgage Loan Modification: Just a Band-Aid?
  Don’t Look Back and Other Tips for Life after Foreclosure
  Where to Look for Help for Your Underwater Mortgage
  How to do a Short Sale on Your Underwater Mortgage and Avoid Foreclosure
  LTV: The Key to the Underwater Mortgage
  How Long Can I Stay in My House and Other Underwater Mortgage Questions Answered
  Pre-foreclosure and You: Making Lemonade out of Lemons
  Don’t Be Fooled Again-Avoid Underwater Mortgage Advice Scams
  Underwater Mortgages: The Inside Story
  More People Walking Away from Underwater Mortgages
  Deed in Lieu of Foreclosure - Might Be An Answer
  Coming Soon to Your Neighborhood: Falling Home Values Mean More Underwater Mortgages
  Underwater Mortgage Foreclosure Options- Yes, You Have Them and Here’s What They Are
  Your Life or Your House: Key Questions to Ask Yourself If You’re Facing an Underwater Mortgage
  Tips on Avoiding Foreclosure
  Underwater Mortgage? Here’s What to Do

Article Tags: bank short sale, home short sales, house short sale, how to do a short sale, how to short sale, mortgage short sale, short sale, short sale definition, short sale foreclosure, short sale help, short sale information, short sale process, short sale training, what is short sale
Referred by: http://www.meetkarennewman.com/



Related Forum Posts
Re: Hi All, - Welcome Aaron!! what type of Real Estate investing do you specialize in? in Toronto I am involved in purchasing properties at wholesale prices prior to the owners going into Foreclosure.
Re: Hi - Thanks guys! I have been helping Real Estate and Mortgage professionals generate leads from the Internet for 5 years now!. I'd be glad to exchange some ideas. Have a great day=)
Craigslist/Kijiji Sales - Would like to know who on this forum is having any success with generating business through Craigslist or Kijiji by posting ads there? What kind of business do you run and what do your ads state? I've been using the sites to generate leads for Foreclosure properties and I've been having some success. One of my Business Coaching client is a software developer and he's been having a lot of success with Craigslist - almost $7000/month. what's your view on it ?
Building credit - Credit is like reputations, I suppose. Takes a lifetime to build, and only a second to destroy.
Marketing and PR ideas related to a Credit Organization - Hello Everybody! I would be very grateful if you suggested some PR and Marketing ideas for a Credit Organization which target market is poor public who live in village and haven't any access to the internet. Thanx in advance


Share this article with your friends. Fund someone's dream.

Leave a comment below or share on the left and you'll help support entrepreneurs in Africa through our partnership with Kiva. Over $50,000 raised and counting - Please keep sharing! Learn more.

Newsletter

Get advice & tips from famous business
owners, new articles by entrepreneur
experts, my latest website updates, &
special sneak peaks at what's to come!

Name:
Email:

Popular Articles

Link Pyramids

The Substance Abusing Employee

Suggestions

Email us your ideas on how to make our
website more valuable! Thank you Sharon
from Toronto Salsa Lessons / Classes for
your suggestions to make the newsletter
look like the website and profile younger
entrepreneurs like Jennifer Lopez.