What is a foreclosure, and how does it work? Foreclosure happens when a homeowner fails to keep up with mortgage payments, and the bank takes possession of the property. It is a legal process in which the bank is entitled to foreclose on the mortgage or trust deed and seize the home.
In North Carolina, there were 5,432 properties with foreclosure filings during the third quarter of 2019. According to a new report from ATTOM Data Solutions, the housing market and economy in this state remain strong, dropping to levels below the pre-recession average. Foreclosure rates until October 2019 are 1 in every 1957. As for the top 5 counties:
- Jones: 1 in every 550
- Onslow: 1 in every 679
- Currituck: 1 in every 697
- Cumberland: 1 in every 955
- Hoke: 1 in every 1021
Causes & Consequences
Homeowners stop paying the mortgage for multiple reasons, from getting fired to having a job transfer. It also happens when the owner quits a job, have excessive debts and bill obligations face a divorce or have complicated medical conditions.
Did you know that every late payment negatively impacts credits? Banks usually wait at least 90 days to start the foreclosure process and take several months to complete it entirely. Still, once the house is lost to foreclosure, the owner’s credit score is at serious risk of dropping dramatically.
Higher credit score means higher foreclosure impact and slow financial recovery. 100 to 160 points could reduce an excellent credit score and could take up to three years or more of on-time payments to fully recover. It is fair to mention that not only is the credit score affected, but interest rates and credit limitations as well.
Homeowners also forget to think about the tax implications of losing their homes. It is essential to consider all the consequences before moving forward with foreclosure, even when it seems the only way out.
The best way to save time and money is by selling the foreclosed property to investors. Homebuyers are problem solvers helping and assisting hundreds of families with their real estate needs. They offer immediate relief with a fair all-cash offer with zero extra fees, long listings, and exhausting procedures. A stress-free alternative to smooth this process.