Beware of Bad Advice About Foreclosure

A very disturbing and potentially damaging trend seems to be emerging in several real estate markets across the country. Especially those markets with flat or even declining values.

The trend? Well, it seems that some very less than scrupulous folks have resorted to promoting foreclosure to people wishing to move and having trouble selling their current homes.

As a result of the slow market and people reluctant to hold two mortgages, a few "rogue" agents hungry for a commission are instructing people to move and just forget about their old house should it not sell in a reasonable time. Just walk away and don’t worry about it, some say.

Beware of that Very Bad Advice!

Here’s what may happen if you go into foreclosure:

You lose all equity you’ve built in your home
Your foreclosure will stay on your credit report for 7 – 10 years and may damage your credit
You may not be able to get another mortgage until your credit is repaired
You may have trouble getting other loans, such as automobile and even student loans
You may still be held accountable for the debt of the foreclosure, including income tax obligations
Even when you do again finally qualify for mortgages and other loans, you will probably pay a higher rate and therefore have a higher payment than someone with undamaged credit
It’s not worth it. Foreclosure is a terrible thing for you, your community, the mortgage company, and the economy in general. Advice to voluntarily go into foreclosure should be taken with a big grain of salt. Well, make that a truck of salt

Let’s all hope this greedy practice of giving people really bad financial advice stops soon or people may be paying a high price for that bad advice – for years to come.