Personal Loss Mitigation-Think Like a Banker

We know what you are going though. It’s a kick in the teeth to be faced with foreclosure. You’ve done everything you can to forestall the inevitable. Okay, maybe you shouldn’t have done that last refinance. Maybe you didn’t need the new car. Maybe it was beyond your control, for example due to job loss, illness, divorce or injury.

Stop kicking yourself. Think instead of how to stem the hemorrhage to your lifestyle and personal finances. In short, think like a banker.

Bankers are not emotional about your home. Nor are they emotional about money. They make decisions based upon the financial bottom line. Take a look at our list below. Then think like a banker and make the best decision based upon what is best for you financially.

1)      No mortgage payments

2)      Foreclosure takes a long time, the house is still yours until the foreclosure is final

3)      No strangers walking though your home during Open House

4)      Sometimes cash for keys is offered after the public  sale

1)      You’ll have to find someplace to live so you will likely become a renter

2)      A Notice of Public Sale may be prominently posted on your front door

3)      Your credit goes into free fall, foreclosure will remain on your credit for 10 years

4)      During that 10 years, employers may disqualify you for jobs or promotions

5)      Under Fannie Mae guidelines, you will be ineligible to buy another home for 5 years.

1)      Find solace in the fact that you sold your home, retaining control and dignity

2)      Mitigate personal  loss, don’t suffer the social and financial stigma of a foreclosure

3)      You can meet and decide upon the new owners

4)      Under Fannie Mae, you can buy again in 2 years

5)      Credit will suffer temporarily but short sale is not recorded on your history

1)      The wait can be frustrating

2)      The bank will intrusively examine all of your financial records and will ask for a hardship letter

3)       Traffic through your home, you’ll have to keep your house spiffy for weeks or months.

4)      There is no guarantee the bank will accept a short sale offer

5)      You’re credit will suffer from the effect of the mortgage lates

Remember, your circumstance will determine your course of action. A short sale won’t work for everyone. However, we urge you to face these decisions in a calm and calculated fashion, just as the bankers do. Don’t give up your home without a “good” fight. We don’t mean tearing the house apart or suing the bank. We mean an intelligent battle during which you make the best financial decisions for your future.  You do have rights and options. Better a controlled burn than a crash and burn.

If you have any thoughts or comments on this blog, by all means let us know! We value your feedback.