When you lose your home due to a foreclosure, it could slash your credit score in half and cripple your good credit standing. Since negative item will stay in your report for 7 to 10 years, it can be detrimental to your quest to rent a new place or obtain a new mortgage so you can get another home.
If you’re not in too much of a hurry to obtain new credit and can live with having the foreclosure in your report until the statute of limitations will have it erased, you can simply wait for 7- to 10 –year period to elapse. Although having this item in your report can negatively affect your credit score, it sort of loses its sting after a couple of years, especially if you have been diligent in paying your bills and other obligations on time since then.
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Another method is to go to your lender and negotiate that you will pay the remaining balance in exchange for deleting the entry from your credit report. Of course, this will take a lot of convincing (and it only works if you have the money to use as leverage) but if you can settle, you’re looking at a highly-improved credit rating that might allow you to obtain a new mortgage.
Look over your credit report thoroughly and check if there are inaccuracies in the entries regarding the foreclosure. If there are, you can use these as grounds to file for a lawsuit. Also, review how the foreclosure was done. Technicalities that have not been followed and other violations can give you grounds to sue them so that the foreclosure can be deleted. If you want to take this route, hire the services of a good credit attorney who knows the ins and outs of the law. In many cases, just the mere thought of facing another lawsuit will make the lender settle or remove the foreclosure. You just have to be very persistent and patient during the entire process.
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