Title: What Happens When You Let Your House Go Back to the Bank? | Home Guides | SF Gate
Headings: What Happens When You Let Your House Go Back to the Bank?
What Happens When You Let Your House Go Back to the Bank?
Losing Your House
Get the Best Mortgage Rate for You
Deficiency Judgments
Credit Post-Foreclosure
Mortgage Free Living
Your Next Step

Content: Many states allow lenders to pursue the difference between what you owe the bank and what they recover from the sale of your house after they take it back. If you owe $210,000 and the bank only gets $160,000 after selling your house and paying its expenses, you'll be on the hook for the remaining $50,000. It's important to talk to a real estate attorney to find out what your liability could be. If you negotiate a deed in lieu of foreclosure, the attorney can also help you ensure that the bank agrees not to pursue you for the deficiency after accepting the deed. Credit Post-Foreclosure
A foreclosure affects your credit report in two ways. The first is that your credit score will suffer from the late payments leading up to the foreclosure. The foreclosure itself will usually decrease your credit score by around 100 to 150 points, and it will stay in your credit report for at least seven years. Furthermore, a foreclosure can make you ineligible to take out a mortgage for a period of time. For example, Fannie Mae won't underwrite a mortgage for you for seven years after you go through a foreclosure. Mortgage Free Living
One of the biggest benefits of losing your house is that you will usually enjoy a period of time during which you can live in your house without making any mortgage payments.