If you’re like most homeowners in Florida and throughout the country, you probably borrowed money to purchase your home. However, failing to repay the loan as agreed could result in foreclosure. Foreclosure is the process a lender uses to repossess a home and resell it to recoup the remaining loan balance.
You may be able to get your house back
Even if a lender forecloses on your home, it may be possible to get it back. State law could give you several months or years to save up the money needed to buy the property from its new owner. However, it is important to note that you may have to pay interest or other fees to do so.
A foreclosure could result in a tax bill
It is possible that your home could sell at auction for less than what the lender was owed. In such a scenario, the bank or credit union could choose to forgive the remaining balance. If that happens, the amount that is forgiven could be considered income. However, this is not the case if you are considered insolvent or meet other IRS requirements.
Can a lender pursue the remaining balance on a mortgage?
A lender may be able to come after you for any money that is owed on a home loan after the home is sold. This is called a deficiency judgment, and you could have to pay the remaining mortgage balance even if you no longer own the home.
A foreclosure can damage your credit
It may be difficult to obtain new lines of credit after a foreclosure appears on your credit report. It may also be difficult to obtain a job or an apartment with poor credit. The foreclosure will remain on your credit report for seven years, but it may be possible to rebuild your credit in less time.
A foreclosure defense attorney may be able to help you keep your home or find another way to end a proceeding. This may allow you to keep your property or otherwise maintain your good standing with creditors.