Homeowners in a financial financial hardship almost never want to give their homes voluntarily. Most of them will do anything they possible can to stop foreclosure, even trusting in companies and investors that will only take advantage of them in such desperate situations. But although homeowners know that they do not want to be forced to move out and give up their properties, few of them really understand the long term effects of foreclosure. They know some of the more common effects, and, yes, being foreclosed will hurt their credit, especially if they have a lot of late mortgage payments on top of the foreclosure. But damaged credit is just one of the reasons to avoid foreclosure and find some solution before the lender takes the home through the entire process.

The lender and their attorneys will call several times a day asking for their money. This can be one of the most stressful aspects of the entire foreclosure process, especially when the homeowners are still in the middle of a financial crisis. They know they can not pay the mortgage, but are afraid to inform the lender of that fact for fear of being put into foreclosure sooner rather than later. The fact that the lender's collection department calls repeatedly at home phones, cell phones, and even workplaces generates even more stress that causes homeowners to avoid confronting the problem.

The foreclosure and sheriff sale will be listed in the newspaper and at the county courthouse, making everyone who is interested aware of the fact that this particular house is being foreclosed due to nonpayment. Often times, homeowners hear from their friends, family, or neighbors that the house is advertised in the paper, and this is their first knowledge of the foreclosure process at all if they have not been opening mail from the bank or their attorneys. Finding out from someone in the community that the house is in foreclosure is one of the most embarrassing situations to be in, on top of not paying the mortgage in the first place.

The house will sell at sheriff sale for much less than what is owed on the house, putting the homeowners in danger of being sued afterwards for any deficiency judgment (although this is rare). This is not allowed by every state and banks rarely pursue it, but it is an aspect of the foreclosure process that every homeowner should be aware of and watch out for, just in case. Although it will most likely not become an issue, banks facing serious losses due to the collapse of the subprime industry may turn to suing their former homeowners for as much money as possible. Thankfully, this has not yet happened.

The foreclosure victims will also lose the house and have to move out before they are evicted by the county sheriffs department. With a foreclosure on their credit, they will have a tough time passing the credit check to rent an apartment, and may have to put down more for a security deposit or pay months in advance. There are ways to get around this, but most former homeowners will find difficulties in finding another place to rent right after the foreclosure has been finalized and for several months thereafter.

The foreclosure victims will not be able to buy a new home for at least a few years after losing their property, unless they save up a large down payment, in the range of about 35% of the value of the the home they wish to purchase. Obviously, this is improbable for most families struggling to keep on top of all of their other bills, but it is in the interest of every family to have an adequate savings account in case of emergency. Funds from the emergency account can eventually be transferred to a new account to save up for a down payment or pay down other bills, as the former homeowners' financial situation stabilizes and improves. But for the first few years after foreclosure, there will be no chance of qualifying for a new mortgage without a very large down payment.

If they want to reestablish their credit, new loans and credit cards will have much higher interest rates and much lower maximum balances. Many companies will simply refuse to make any loans to the former homeowners, and the companies that specialize in poor credit lending often charge extra fees on top of high interest rates. It is important for foreclosure victims to begin reestablishing good credit habits after losing their homes, though, especially if they wish to become homeowners again in the future. If being foreclosed and evicted has not taught them the benefits of using credit wisely and sparsely, nothing will.

Those are some of the main repercussions homeowners will have to deal with when facing foreclosure, and none of them are really a lot of fun at all. In fact, most of them are quite stressful and will continue to plague the homeowners for years after the original foreclosure. If homeowners can find some way to stop foreclosure besides doing nothing, then they can potentially avoid some, if not all, of these unpleasant aspects of losing a home. Giving up on the house will not prevent any of these stresses of the process, but by fighting back against foreclosure, homeowners can take back control of their financial lives and keep their personal wealth and assets where they belong: in their own families and communities.

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