These days, record-breaking foreclosure statistics are coming out with numbing frequency. But what happens to the thousands of families after their personal financial disaster is added to the mounting national count?
Unfortunately, once a foreclosure is final, the financial and emotional upheaval is far from over.
While there's considerable pain, most foreclosure victims will eventually become homeowners again, says Jay Zagorsky, a research scientist at Ohio State University.
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Still, that won't happen anytime soon, especially since mortgage rule maker Fannie Mae has recently lengthened the time that must lapse between a foreclosure and approval for a new mortgage.
Here's a look at the issues foreclosed families grapple with, and some smart solutions.
Consequences of foreclosure
- Finding a new home
- Suffering the credit fallout
- Buying another home
- Owing an employer an explanation
- Getting hit with a tax bill
- Living through loss
Finding a new home
The immediate problem is obvious: where and how to find a new place to live.
Lack of cash for a rental deposit is probably the biggest barrier to foreclosed owners getting re-established on their own. Landlords will sometimes accept tenants who have a credit score of just 580, says Maurice Ortiz, marketing director at The Apartment People in Chicago.
But if landlords look beyond a numerical score to credit records, a foreclosure may spook them, since it indicates the potential tenant hasn't paid his housing bills, adds Ortiz. If the foreclosure can be explained, however, and if the rental candidate has a solid job history, he may be accepted.