Housing News

Foreclosure & Your Chances of Employment

Losing your house is just the start of your troubles.

If you are already behind in your mortgage payments and do not expect to change your financial situation, you are most likely to face foreclosure. According to the Certified Distressed Property Institute, foreclosure results in the following:

• homeowner ineligible for a Fannie Mae-backed loan for 5 years
• investor ineligible for a Fannie Mae-backed loan for 7 years
• can affect future mortgage rates
• may lower credit score 250 to more than 300 points for up to 3 years
• remains on a person’s credit history for up to 10 years
• may cause security clearances to be revoked and position terminated
• may affect a person’s employment chances
• bank may pursue a deficiency judgment on home’s remaining balance

One outcome that is not often mentioned is the repercussion foreclosure can bring to a homeowner’s employment chances. Yes, most companies these days are looking beyond the applicant’s resume. Managers and HR heads make sure the people they hire have all the qualities they necessitate – and this includes employees with a stellar credit history.

After sifting the candidates through interviews, they’re most likely to conduct a background financial check (aside from the criminal record clearance), drug screening result, and medical assessment. Others are even blunter that during the initial interview they ask the candidate’s FICO score (too bad for those below 660).

So you may ask: what does my payment history have anything to do with my future job performance? First, you have a higher probability of not meeting your deadlines. Second, it would undermine your capabilities of handling more and higher roles in the company. In other words, if you can’t handle your personal finances well, what more for the company’s projects?

With this explanation, homeowners on the brink of losing their homes should seek mortgage counseling from not-for-profit organizations (those that do not require payments in exchange for their services). After all, it’s even more difficult to have lost both of home and a job prospect that could have brought your finances to recovery.

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