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Lake County foreclosure lawyersThe real estate market is a complex combination of factors.  However, it generally reflects the overall economic health of the country. When the economy is healthy, the real estate market does well, but when economic growth slows, there is usually a corresponding slowdown in home sales and new mortgages. In such situations, foreclosures generally increase as well.

With all of this mind, a recent report indicates that the economy is likely to be doing well, as the number of properties in foreclosure around the country has dropped fairly substantially compared to the same time last year. In the greater Chicago area, defaults, foreclosure filings, and lender repossessions have also decreased.

A Look at the Numbers

Last month, ATTOM Data Solutions released the Midyear 2019 U.S. Foreclosure Market Report that tracked foreclosure activity throughout the United States for the first six months of 2019. The report found that just under 300,000 properties are in some stage of the foreclosure process, a drop of 18 percent compared to the mid-year report from 2019. This figure represents the lowest level of foreclosure activity in the last 12 years. The 2019 number is a staggering 82 percent decrease from the first half of 2010 in which 1.65 million properties had foreclosure filings.

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Libertyville foreclosure defense attorneysIf you financed the purchase of your home with a mortgage loan, you probably signed what seemed to be mountains of paperwork. Buried in each document and hidden in confusing language were the terms and conditions of your loan and what would happen if you failed to make the required payments. Off the top of your head, you might not be able to recall all of the specific details, but you probably realize that if you do not keep up with your mortgage, the loan will go into default. If you stay in default for long enough, the lender will initiate foreclosure proceedings and eventually take your home.

With this in mind, it would seem that defaulting on your mortgage is something that should be avoided at all costs. In some situations, however, a strategic default could help you find a way out of a difficult situation.

Understanding Strategic Default

By definition, a strategic default occurs when a borrower intentionally allows his or her mortgage to default despite having the money to make the payments. The terms “strategic default” and “strategic foreclosure” are often used interchangeably, but they are not really the same thing. It is possible for a person who decides to use a strategic default to completely walk away from the property and allow the bank to foreclose, but not every strategic default ends in foreclosure.

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Lake County foreclosure lawyersRegardless of who you are, how much money you have, and the types of property you own, the word “foreclosure” is likely to generate feelings of fear, anxiety, and stress. If you are struggling to make the mortgage payments on your family home, the idea of foreclosure is likely to be especially frightening.

Most people understand the basic steps of foreclosure, even if they do not know all of the details. In short, they know that the lender will eventually force a homeowner who is in default to leave the property. Then, the lender will reclaim possession of the home and attempt to sell it in an effort to recoup some of the losses incurred. What many people do not realize, however, is the effect that a foreclosure will have on the borrower’s credit score.

Your Credit Score

Your credit score is a statistical rating that lenders and other institutions use to evaluate how well you manage debt. Credit scores can range from 300 to 850, and higher scores indicate stronger creditworthiness. A credit score above 740 is considered to be “Very Good,” and above 800 is considered “Excellent.” Between 670 and 739 is “Good,” while 580 to 669 is “Fair.” Anything below 579 is considered “Poor.”

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Libertyville real estate attorneysIf you are looking to buy a home, you might have friends and family members suggesting that you should look into buying a foreclosure property. A foreclosure property is a piece of real estate that has been put up for sale by the bank after the original owner of the property failed to keep up with the mortgage payments.

Because a foreclosure sale is typically an auction, you could potentially get a great deal. But, what happens to homes that are foreclosed on and put up for sale at an auction but do not get sold? These properties revert back to the lender and become what are known as real estate-owned, or REO, properties.

Failed Foreclosure Auctions

When a lender seizes a home in foreclosure and puts it up for sale initially, the sale is usually conducted as a public auction. This means that the home will go to the highest bidder. In many cases, however, bidders do not get the chance to see or inspect the property before the auction. Additionally, the high bidder will normally be expected to pay for the property on the spot with cash or a certified check. Financing is available in certain situations, but most auctions sales are completed without it.

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Lake County foreclosure defense attorneysIf you are facing the possibility of foreclosure, you probably have many concerns. You are likely to be worried about the details of the foreclosure process in addition to more personal considerations such as where you are going to live and how you will repair your credit in the years to come. It is not unusual for homeowners in foreclosure to believe that they will be lucky to get through the proceedings without owing anything additional on their home. Depending on the circumstances of your situation, however, your lender might actually owe you money when everything is all said and done.

Balancing the Numbers

As a homeowner, you probably know that foreclosure is the process that a lender will use to reclaim your home if you fail to make your agreed-upon payments. During foreclosure, you will be given notice to vacate the property, and the home will be sold at a sheriff’s auction. The proceeds of the sale are then used by the lender to satisfy the remaining balance of the mortgage loan. What happens next will depend on the situation.

If you currently owe more on your mortgage than what your home is worth, the proceeds of the sheriff’s sale are unlikely to be enough to cover the full remaining balance. The amount remaining after the proceeds of the sale are applied is called a deficiency. Unless you have negotiated with the lender in advance, you will almost certainly be responsible for paying off the deficiency amount.

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