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Strategic Loan Defaults can damage your credit & more for years

'Strategic Defaults' Can Damage Credit for Years
Home owners who choose to default on their mortgage even though they can afford the monthly payments can expect to take a significant hit to their creditworthiness, some credit rating firms say.

A record of the default — initially as much as 200 points — stays on a credit report for seven years. This will have an impact on the defaulter’s ability to get credit of all kinds and potentially his or her ability to buy insurance and even get a job.

The debt that foreclosure erases may be considered income, and Uncle Sam may want to collect taxes.

"It's by no means a move to be undertaken lightly," says Maxine Sweet, vice president of public education for Experian.

Source: ARA Content (07/30/2010)

If you are in default on your mortgage consider trying to "short sale" your home. Depending on your individual financial situation and your lender this may be a much better option than allowing the bank to foreclosure.  Less negative credit impact and it show's that you at least attempted to get everything you could in the current market for your home. 

Contact Jon Becker - Century 21 Northland   for a free no obligation consutation on your homes current value and your best strategy for your personal situation and current market conditions.

jon@c21jb.com

www.c21jb.com

231-342-5401

 

Posted: Monday, August 02, 2010 3:12 PM by Jon Becker

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