During what stage of foreclosure is one's credit affected?

Question

My friend will be going into foreclosure in a month or two, but the proceedings have not begun (he paid the mortgage recently, but won't be paying it next month.) Thus, he still has good credit.

How long does the foreclosure process take?

When, in that process, is one's credit affected?

Should one buy another home BEFORE their credit is affected?

Thanks.

Answer 1

The moment you were 30 days late on your mortgage your credit is affected.

From the time the NOD (notice of default) is filed, it takes 3 months, 3 weeks and 3 days.  3 mos from NOD to sale, 3 weeks from time of notice of trustee sale to sale, and 3 days for the sheriff to come and "visit" and evict.

Why would your friend want to buy another home if he's not going to pay for this home.

The "new" mortgage lender will want to know what your friend will be doing with his current home, source of down pymt, etc.

Answer 2

Each time you are late on any istallment contract with a lender that reports to the credit bureaus, your credit rating is affected. The more time you're late and the more deliquent you get the bigger hit your credit score takes.

Answer 3

Usually 30 days after payment is defaulted it is reported to the credit bureaus.

Answer 4

Your credit is affected before foreclosure occurs.  In order for foreclosure process to begin, you are already in serious arrears with your mortgage payments and possibly in arrears with other debts.

Most businesses report your debts as a monthly history from the time the credit is obtained and through the time the debt is paid off.  Your history will remain for at least 7 yrs. good & bad, however it's common to see the history appear 8, 9 yrs. laters, mistakes, lenders' & collection agencies tricks & revenge eventhough illegal.

Bankruptcies aren't as easy to process as they were years ago and that'll show up on your record @ 12 yrs.

Absolutely the time to buy another home is before your credit appears bad.  If the credit is still good, your loans terms are more favorable interest rate alone could be several percent less than with flawed credit.  Additionally with good credit you can shop for competitors' wanting your business.

It's alot harder to "fix" bad credit than alot of those infommercials make it look.  You can fix mistakes on your own, don't need them to do it but if you were late with payments it's going to show up that way and those promises we see advertised can't fix those.

As to negotiating paying less on the dollar, you can attempt that on your own before paying a business to do this.

Lastly, a good attorney specialized in foreclosures should be consulted with before making major decisions that you might regret later.  

Good luck and work quickly.

Answer 5

The credit has already been effected.  By going into FC it suggests that late payments have been made.  Late payments = points off credit.