Page 58 - ForeclosurePreventionGuide_Final _Neat

Topic 6:
Rebuilding After Foreclosure

Topic 6: Rebuilding After Foreclosure

STEPS TO REBUILDING AFTER A FORECLOSURE

(Source: Adapted from NeighborWorks and Freddie Mac)

Understanding exactly how your foreclosure issue was resolved and developing a budget and savings plan
is critical to recovering after a foreclosure or a loss mitigation process. Your options may be constrained
due to limited income or savings, debt issues, and credit history. The process of rebuilding has several
steps and will take time.

Step 1: Retain Documentation of How the Foreclosure was Resolved
A foreclosure may be resolved in one of a few methods: foreclosure; loan modification; deed in lieu of
foreclosure; short sale.

Retain all documentation about how your foreclosure was resolved.

Check your credit report to see how the foreclosure is being reported. You may obtain a free credit
report at www.annualcreditreport.com. If you find errors in your credit report, you have the right to
correct the information. Check out the Federal Trade Commission website for more information:
http://www.consumer.ftc.gov/articles/0155-free-credit-reports.

Review county recorded documents to see what, if any, documents were filed about your foreclosure. Not
every county has documents available online, so you may need to contact your county recorder’s office
directly.

Step 2: Create a Crisis Spending Plan
The second step is to create a crisis spending plan to help meet your immediate financial obligations. The
crisis spending plan should prioritize basic needs. Basic needs include payments and bills for items
necessary for survival, such as food, medical, housing, and utilities. To reduce your spending on basic
needs, apply for social service programs that can provide food, clothing, emergency housing vouchers,
and emergency utility vouchers to assist you during this transition process. (See Community Resources on
page 67 for contact information)

Other items like car loans, child support, and income tax debts may be prioritized and included in the
crisis spending plan.

Other expenses are a lower priority. Information is available at
http://www.washingtonlawhelp.org/resource/prioritizing-debt-which-bills-do-i-pay-first?ref=M1p66.

If you have excessive consumer debt, talk to an attorney about your options.

January 2020 | Page 58