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When lenders fail to foreclose (2 of 2)

Welcome back. In the previous post we began discussing how an “unfinished” foreclosure can come back and haunt homeowners who have rebuilt their credit after bankruptcy.

Essentially, even if a bankruptcy absolved homeowners of the financial liability associated with the home they walked away from, they could remain on the property’s title which could prevent them from qualifying for future loans.

So while the individuals may have worked hard over the past few years to repair their credit in order to qualify again for a home or auto loan, they can be denied because the bank never actually foreclosed on the property that they walked away from.

In some cases, banks don’t actually follow through on the foreclosure process, essentially leaving the property in limbo, because they are simply overwhelmed by foreclosure properties, and it is up to them to decide whether or not to foreclose on a property.

As you can imagine, this can result in a major headache and complicated legal mess for individuals who thought that they had left their financial troubles behind them. It is also another reason for homeowners to consider a deed in lieu of foreclosure or a short sale to get their names off of the property’s title.

Wisconsin residents who are considering bankruptcy and are also facing foreclosure need the guidance and knowledge of an experienced bankruptcy attorney.

Unfortunately, if the issues are not handled correctly the first time around, they can come back to haunt you after you thought your financial troubles were completely in your past.

Source: Time Warner Cable News, “People running into obstacles buying a home following bankruptcy,” Solomon Syed, May 11, 2014

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