Mortgage Foreclosure Has Little Effect On Life And Credit Of This Client
I have advised many people over the past three years to walk away from their upside down mortgages- the “strategic default.” My clients typically are worried about foreclosure’s effect on their professional lives and their credit. Today I received a phone call from a client who consulted me over a year ago about mortgage foreclosure on his primary residence. After speaking with me initially the client decided to stop paying his mortgage. He lost his home to foreclosure in July. He called for some additional legal advice. After answering his legal questions I asked him how the foreclosure affected him and whether he had made the right decisions to walk away. Here is what he said.
The client told me that after the foreclosure his life can be described as “business as usual.” He recently got a new and better job. The job application asked him about prior foreclosures, and he answered truthfully. The foreclosure was not an issue during his job interview for his new job, nor had any other prospective employer raised the issue during his job search. He said that people with foreclosure on their credit report were no longer “outliers.” Its common.
The client has been getting credit card solicitations continually. He recently purchased a new car and got a car loan. Not 0 % interest, but 8% interest. High, but not impossible to deal with. His point was that he qualified for a new car loan four months after the foreclosure. Overall, the client stated that the “psychological and social stigma of foreclosure” was much less than he expected.
