What are the Consequences of a Foreclosure?
A foreclosure occurs when the homeowner has failed to make payments and has defaulted or violated the terms of their mortgage loan. The process can be stressful, embarrassing, and it can have long-lasting consequences, such as:
- Eviction from your home—you’ll lose your home and any equity that you may have established
- Stress and uncertainty of not knowing exactly when you will have to leave your home
- Damage to your credit—impacting your ability to get new housing, credit, and maybe even potential employment, for many years
- May owe a deficiency balance after the foreclosure sale
- Lose any relocation assistance or leasing opportunities that may be available with other options
- Forfeit ability to get a Fannie Mae mortgage to purchase another home for at least 7 years (Fannie Mae guidelines)
A foreclosure can usually be avoided—even if you already received a foreclosure notice. Contact your mortgage company today to determine if you can avoid foreclosure. If you need further assistance, contact a Fannie Mae Mortgage Help Center.
Related: Foreclosure Comparison Chart
It’s important to know your options and understand their impact on your financial future. Near the bottom of our Foreclosure page, click on the “Foreclosure Comparison” tab to see the advantages offered by a Short Sale or Deed-in-Lieu over a foreclosure.
While these choices may be difficult to make, having the information will help you feel more in control and ready to move forward.