Why is foreclosure so bad

Maintenance and condition can be a problem in foreclosed properties because of the circumstances under which the previous owner moved out and the amount of time that the house may have been unoccupied.

Some of the main concerns include the following:. Bank-owned properties are sometimes disgustingly dirty because of time spent sitting empty, intentional neglect by the previous owner, or occupancy by vagrants. When a home is locked up with no air circulating for months, built-up dirt can cause the entire house to smell.

The previous owner may have made changes to the home without obtaining the proper permits. A typical example is converting the garage into a living space so more people can live in the house. These changes may be undesirable to new owners or create headaches for them with local government officials.

If the previous owner started to improve the home but fell on hard times, then there may be partially finished work in the house. The bathrooms may be redone while the kitchen has not been updated in 40 years, or there may be new floors in the living room while the bedrooms still sport outdated carpeting.

Additionally, if any repairs were made, they may have been done by the owners themselves or by unlicensed professionals—in other words, people who may not necessarily have done the work correctly. Mortgage lending discrimination is illegal. If you think you've been discriminated against based on race, religion, sex, marital status, use of public assistance, national origin, disability, or age, there are steps you can take. With no one living in the home, the electricity may be off unless the bank has intentionally kept it on.

With no light, it can be hard to see what you are buying in some rooms, particularly basements and windowless bathrooms. A small leak under the kitchen sink can lead to a mold problem, and a roof leak or burst pipe can lead to major water damage.

With no one around to take care of issues as they occur, small problems can quickly turn into big problems, and big problems can turn into disasters. If the previous owner couldn't afford the mortgage payments, then you can bet they also could not afford to repair leaks, termite damage, a broken garbage disposal, or anything else. Depending on the climate where the home is located, the lawn and landscaping may be totally dead or extremely overgrown.

Banks usually do not pay for gardeners to maintain the yard of a foreclosed home. Sometimes foreclosed homeowners are locked out of the property before they can move their belongings and, in some cases, they do not take everything with them. Many real estate-owned REO properties contain furniture, trash, clothes, and other items that you will be responsible for disposing of when you become the property owner. Damage is not uncommon in foreclosure properties, and when houses are not lived in, it is easy for them to fall into disrepair from neglect.

In extreme cases, it may be caused by vandals or even the former owner. When a property sits vacant, especially if it is in a moderate- to high-crime area, new owners may have to contend with graffiti, broken windows, and other damage. Broken windows can be common in REOs for several reasons.

As mentioned previously, vandalism could be a cause. Also, when banks lock out owners while taking possession of the property, the former owner may break a window or door to retrieve belongings. In rare or extreme cases, previous owners may also purposely inflict damage at the bank's expense by putting holes in walls or tearing off baseboards and crown molding.

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Editorial Policy: The information contained in Ask Experian is for educational purposes only and is not legal advice. You should consult your own attorney or seek specific advice from a legal professional regarding any legal issues. Please understand that Experian policies change over time. Foreclosures occur when a lender repossesses a home from a borrower who has failed to make mortgage payments.

The lender, generally, then offers the home for sale at a public foreclosure auction. If you buy a foreclosure at auction, you may find yourself in the position of needing to evict previous owners, relatives, friends, renters or even squatters. If the home has been vacant for some time, its pipes may have frozen or it may now be home to new tenants, in the form of rodents and bugs. Typically, once the bank owns the property, it addresses any outstanding issues.

When buying an REO property, you can — and should — have a home inspection done as a contingency to purchase.

Need to be out of your house and into your new one within a month or two? The foreclosure market is probably not for you. A foreclosure or short sale will crush your credit score for 7 years and potentially ruin your future as well. If you have already foreclosed then stop the bleeding by making sure all other bills are paid on time.

Perform great work at your existing firm. Build alternative income streams so you have the optionality in case something else bad happens. Carefully weigh the pros and cons of doing a foreclosure before proceeding. If you are already 30 days late or more on your payments, check your credit score and call the bank to see if you can work something out.

If you wait until you are 90 days late, there is no turning back. Shop Around For A Mortgage. To fend off foreclosure, I highly recommend refinancing your mortgage.

Credible offers some of the lowest refinance rates today because they have a huge network of lenders to pull from. When banks compete, you win. Explore real estate crowdsourcing opportunities.

Real estate is a key component of a diversified portfolio. Real estate crowdsourcing allows you to be more flexible in your real estate investments by investing beyond just where you live for the best returns possible. Sign up and take a look at all the residential and commercial investment opportunities around the country Fundrise has to offer. I am divorced and my ex was ordered to sell our house we own together.

I moved out and he still lives at the house. He is refusing to sell even though it was a court order to sell and split the profits. I just found out he has not paid in over 3 months and the bank is about to start the foreclosure process.

I am about to get married again in a month and wanted to know if once I get married and than my house gets foreclosed on will the foreclosure affect my new husbands credit. This happened to me. My husband allowed the house to go into foreclosure and it has destroyed my credit. He was suppose to sell or refinance, did neither and lost it. Now I can not do anything to purchase a new house. The foreclosure wont affect your new husbands credit because his name is not on it. I am currently divorced and I want to foreclose the house, becos I am living on the alimony and the mortgage increases every month and the expense to income ratio is not the same.

The mortgage debt is same as the purchase price, becos he paid only interest for 15 yrs. As per your experience what do you suggest? The state is New Jersey. Home ownership ruined me. Wife got sick. Was struggling to make payments.

Was never late, but it was tough. Went to the bank to see what could be done. Offered me a loan modification with a very reasonable monthly payment. I accepted their terms. Had to make 3 of the payments before the modification would be finalized. Made the 3 payments, but could never connect with the final contract.

Offered to have it e-mail to me, faxed to me, or fly to wherever I needed to get it, but the only option was to have it fedex to me. It never came after they said it was sent 3 times. Tracking number was bogus. They refused all my other payments after that, mailing them back to me, and 3 months later they foreclosed.

My credit score is still averaging poor — low average, but that is meaningless compared to the depression, and thoughts of suicide and homicide I have had to live with since then. I was happy before I got the house, and was thrilled with the home when I had it, but now I am so homesick, it just was not worth it. I am sorry that this happened to you and your family. Unforeseen occurrences happen all the time.

I am happy that you put your family first. This is a cruel world that we live in. I got behind on one of my payments and the bank sow that I had missed two payments.

I had my receipt and faxed it to them. I was told afterwards that it was in the drawer. I made payment plans for 6 consecutive months. I paid on time but when I got to the 4th or 5th month I was told that a payment was missing and I need to increase the payment amounts along with another large down payment. I too eventually got foreclosed after 23 years. My loan was 30 years. Purchasing a home can be very stressful. I think that the bank should have worked with you. I thank the most high that you are living and ok.

You could try to buy again after two years. So sorry to hear what happened to you. I had a home that was mortgaged through Wells Fargo. I do all my banking online and have always paid all my bills on or before they are due and have an excellent credit rating.