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Foreclosure

By Terry Savage on February 10, 2019 | Credit/Debt

My son bought his condo independently at age 20… he has made some poor immature financial decision in the last 3 years and was just told he is in preforeclosure…the mortgage company has said they are going to provide him with a reinstatement quote ( which he undoubtedly won’t be able to afford or he wouldn’t be in this situation) or he can try to get into a loss mitigation program… can you provide any advice or other options? He was in the process of a repayment plan when this occurred…he had one month left and he was back on his normal track but his December payment was due on the 31st and since he thought it was a closed holiday he didn’t make the payment until after the holiday on the 2nd, so they foreclosed… he only missed 1 payment since this started.

Terry Says

It’s an old Savage Truth that “the lessons that cost the most, teach the most’!  That seems to be the case here.

You say he was in the process of a repayment plan — with whom?  the bank that issued the mortgage?  the mortgage servicing company?

When he gets the reinstatement quote, are YOU going to put up the money — undoubtedly at least two months payments, maybe more in penalties and interest?  If not, are you willing to stand by and let him lose the condo to foreclosure?

The implications of foreclosure are serious.  Not only will his credit be ruined for at least 7 years (and remember, potential employers will typically check his credit report, as well as insurance companies, etc) — so this could have far-reaching implications.

If you do give him the money, are you willing to become  a co-signer on the mortgage. That could have serious implications for your own credit if he does a repeat!

I suggest immediately calling the National Foundation for Credit Counseling  — a trusted non-profit — at 800-388-2227.  That will connect him with the nearest local office.  Have him set up an appointment, bring in all the papers –and do it NOW before things get worse!

 

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