Foreclosure in Detroit>Question Details

Prettysmart, Home Buyer in Detroit, MI

If your home is going to be foreclosed on what is the best course of action to start over? Do you try to?

Asked by Prettysmart, Detroit, MI Sat Jul 12, 2008

purchase a new home before the foreclosure hits your credit report or do you stay in the home as long as possible, save money, and go the rental/credit repair route for several years?

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I know some people who do buy first, but all the late payments will show up on your credit report, so might be hard to get a mortage.
Most people rent and repair credit. Stay in your home as long as possible.
1 vote Thank Flag Link Sat Jul 12, 2008
PrettySmart,

I'm not a financial planner and they might have a better answer.

I suggest trying everything you can to avoid foreclosure. This website might help.
http://www.hud.gov/local/index.cfm?state=mi

There are also housing counseling agencies available on the site.

The State of Michigan may also be able to help.
http://www.michigan.gov/ag/0,1607,7-164-34391-180413--,00.html
Web Reference: http://mi-living.com
1 vote Thank Flag Link Sat Jul 12, 2008
There are several things you can do but first I recommend you speak with a real estate attorney and your tax advisor. The Mortgage Forgiveness Act of 2007 is slated to expire at the end of this year and if it is not extended, you may end up paying federal taxes on the amount of debt forgiven.

A short sale will not hurt your credit as bad as a foreclosure so yo do need to consider that. Again, this is something that you should discuss with an attorney.

Good Luck!
0 votes Thank Flag Link Sat Sep 15, 2012
If you home is going to foreclosure it has all ready hit your credit report as late pays, I don't believe your credit scores would allow you to purchase, if you have that kind of money bring your home current with all the outstanding debit.
http://www.lynn911.com
http://www.homes-for-sale-dallas.com
Web Reference: http://www.lynn911.com
0 votes Thank Flag Link Sat Jul 12, 2008
I suggest that you try to avoid the foreclosure if possible. Why are you behind in your payments? If your loan has adjusted or is going to adjust, speak with your lender and try to negotiate a workout plan. The banks really do not want your home and many are willing to work with the owners.

This is best done before you are behind on your payments. Even if you are behind it is still worth while to make the effort to work with you lender.

Late mortgage payments and a foreclosure will stay on your credit report for many years.
0 votes Thank Flag Link Sat Jul 12, 2008
If you have been late on your mortgage trying to get another mortgage is going to be hard. If you are definitely going to lose your home, have you considered a deed in lieu of foreclosure? This allows you to give the deed back to the bank and walk away with a 0 balance on your mortgage. This looks better on your credit report than a foreclosure. This is especially helpful if you are upside down in your mortgage. Talk to a real estate attorney and see what is your best option. Also, the bank will have to approve you for a deed in lieu so you may want to talk with them first to see if you qualify. Good luck!
0 votes Thank Flag Link Sat Jul 12, 2008
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