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Foreclosure Overview

A foreclosure is when the bank takes possession of your home because you failed to make your mortgage payments. The foreclosure process differs by state � sometimes it goes through the courts, sometimes not � but it is always one potential outcome of your decision to stop making your mortgage payments. (And, as we�ve said, when you stop making your payments, even if you�re going to try for a short sale or deed-in-lieu, foreclosure is a potential outcome you need to prepare for.)

Whether or not you have a financial hardship, you could make the decision to let the bank foreclose on your home. If that�s a decision you�re considering, there are pros and cons on both sides, and a whole host of potential pitfalls that you need to be aware of. We outline some of them here, but to really understand what a foreclosure would mean for you, you need a one-on-one personalized consultation with an experienced professional. Which is what you�ll get with the Underwater Homeowners Assessment and Action Plan.

    Foreclosure might be right for you if�
  • Youâ��re underwater but you either canâ��t afford your mortgage payment anymore and/or have to move (as for a job)
  • You can pay your mortgage today, but only by borrowing from your financial future (as in tapping your retirement accounts and/or kids college funds)
  • You are so far underwater (owing so much more than your house is worth) that it will take many years just to get back to even
  • You have tried other options (loan modification, short sale, deed-in-lieu) and they didnâ��t succeed
But you won�t really know what�s right for you until you get the Underwater Homeowners Assessment and Action Plan .

Foreclosure Pros & Cons

Foreclosure Pros

  • If it allows you to get out from many years of negative equity on your mortgage, a foreclosure could be in your best long-term financial interest
  • By defaulting today (when the Debt Relief Act still applies), you could avoid having to default later if your mortgage payment does become unaffordable
  • A foreclosure today could allow you to become a financially healthy homeowner again in the future (instead of buried underneath a mountain of mortgage debt for many, many years to come)

Foreclosure Cons

Is a foreclosure the right decision for you? You won�t know until you sit down one-on-one with an experienced professional to evaluate your unique circumstances.

Foreclosure Resources

Homeowner 101 Authorized Legal Advisors

Foreclosure in the News

Foreclosure Resources

Foreclosure Scam Alerts

Strategic Default Videos

Do Homeowners Have a Moral Obligation to Pay the Mortgage at All Costs?

Pat Lloyd and Tyler Heymann of Prism Financial Concepts discuss the issue of "moral obligation" and short sales. Do homeowners have a moral obligation to pay the mortgage at all costs? Banks certainly don't hold themselves to that moral obligation - they frequently default on their mortgages when doing so is the right business decision. Says Pat, "Please don't hurt your financial future to hang on to an underwater home. It is not your moral obligation to do so."

Healthy Homeowners = Healthy Economy

To get out of the real estate crisis and economic recession, homeowners need to get out from underneath the crushing mountains of mortgage debt.

PBS NewsHour Interview with Brent White � Strategic Default: Immoral or Not?

PBS NewsHour interview with University of Arizona law professor Brent White who believes it IS moral for underwater homeowners to walk away.

Watch other videos

Take Action

While most organizations and programs out there are dedicated to helping homeowners avoid foreclosure, in some cases, for some homeowners, foreclosure might be the best option for their long-term financial health. It might be the quickest way back to a place where homeownership is a source of financial stability and peace of mind.

Is letting the bank foreclose the right option for you? It depends completely on your personal financial situation and your unique circumstances. Just because your friend or neighbor or cousin had a home foreclosed and it turned out great (or terrible) for them doesn�t mean it will for you.

You can only know what�s the right decision for you and your family after you have a full picture of your financial situation and how a foreclosure might affect you financially today and in the future. That�s exactly what you�ll get with the Underwater Homeowners Assessment and Action Plan.

Learn more about the Underwater Homeowners Assessment and Action Plan

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