Certain homeowners may be able to take advantage of foreclosure alternative options like short sales or deed in lieu of foreclosure plans. Obviously, homeowners who face the loss of their home have attempted to gain foreclosure prevention assistance through programs like modifications, but in instances where homeowners face the inevitable loss of their home, these alternative plans can be beneficial.
Foreclosures have been a major problem as of late as many homeowners are accusing servicers of simply signing foreclosure documentations without properly reviewing whether a homeowner could benefit from assistance. Yet, in cases where homeowners have been able to use foreclosure alternative options, avoiding the foreclosure process may be helpful in the long run as it could cause less of a drop in a homeowner’s credit score.
Obviously, homeowners who have strategically defaulted and walked away from their mortgage have taken a large hit to their credit score and may be unable to enter the housing market again for years down the road. While homeowners who do use foreclosure alternative options may suffer a setback in their financial life, many lenders see homeowners who have suddenly come upon a difficult financial time, and have chosen to use a foreclosure alternative plan as a result, as responsible homeowners, which could lead to more lending opportunities in the future.
Essentially, homeowners who have suddenly been unable to make their mortgage payments due to factors outside their control may qualify for options like a short sale or deed in lieu of foreclosure program, but also may be seen in a more positive light by mortgage lenders in the future.
Understandably, most homeowners who use foreclosure alternatives will not immediately be in a financial position to reenter the housing market, but by seeking out these types of assistance plans, homeowners, again, may minimize the damage done to their credit score in some cases which might allow for an easier road when repairing their credit history after losing their home.