Second Mortgage

So what really is the end results when someone has there home foreclosed?

Well it normally takes about six months for a morgage company to forclose on a home. It can be sooner or later, just depends on how much of careless the creditor is?

Then within three months this will show on there credit report. It will affect the credit score as soon as it is reported to the credit bureaus.

The end result? Well, if you mean many years from now, the effect will be determined by what else happens in the mean time. In the shorter term, you can get another house. Under the Fair Credit Reporting Act, nothing bad can stay on your credit report for more than seven years, except bankrupty which stays for ten years.

However, the real problem is when to start counting. Banks and other creditors want to keep negative info on your report as long as they can by claiming that the 7 years doesn’t start until their last action of calling you or their last letter to you, rather than the due date of your last missed payment.

They help each other out this way by creating excuses to charge higher rates to people with low credit scores.

Lenders will always ask you about stuff that is not allowed by law to be on your credit report. They can’t report a BK or a foreclosure after the time is up, but they will ask you when yoyu apply wether you have ever had a BK or foreclosure.

It is not clear whether it is illegal for them to ask or whether it is illegal for you to “lie” in response. Just like a teacher who asks a child in front of the class, do you wet the bed. It is not a lie for him to say no even if he does wet the bed because the class has no right to know. And refusing to answwer is the same as an admission.

To improve your score you need to pay everything on time for a while, and start to build new credit relationships. You can use the landlord and utility companies as references but they do not usually report to the credit reporting companies so you have to ask specifically for a reference.