The housing market has finally started to turn itself around, there are less and less “for sale” signs and better mortgage rates than there were 5 years ago around this time. However, since the time has finally passed this means that the rough economic decisions you might have had to make might start really showing their true colors. Its takes a while for the red to show up on your ledger, but how long, and for what period of time will this red mark remain on your credit report.
A credit report is generally updated every 30 days to line up with creditors billing cycles. Within 30-90 days after your delinquent mortgage payments, the lenders will start the foreclosure process. Once the bank files for a foreclosure, rules the loan delinquent, and processes the sale of the home, the entire process can take between 90-180 days. The foreclosure will appear on your credit report at a similar time. It’s possible for it to show up on your report a few days after the sale, or up to 30 days afterwards depending on where the bank is in their billing cycle.
The impact of a foreclosure showing up on your credit report is roughly a 35 percent decrease in your credit score for the first year. The impact is likely to be more severe for the first two years, lessening as time goes on. Ironically enough, the higher your score was before the foreclosure the more negative impact it will have. If you have foreclosure questions Stephen K. Hachey, a Florida real estate attorney, can help. Contact him at 813-549-0096.