Eviction from your home—you’ll lose your home and any equity that you may have established. Stress and uncertainty of not knowing exactly when you will have to leave your home. Damage to your credit—impacting your ability to get new housing, credit, and maybe even potential employment, for many years.

What happens when a house goes into foreclosure?

If the buyer fails to make the agreed loan payments over time, the lender can sell the property to recoup the money it provided as a loan. A ‘foreclosure sale’ is when a lender (such as a bank) transfers the title of the property to itself before selling.

What happens to your credit if your house is foreclosed on?

A foreclosure stays on your credit reports for seven years from the date of the first missed payment, bringing down your credit score. After that period of time, the foreclosure mark should automatically fall off your reports. But you can start working to restore your credit score right away.

How much should you offer on a foreclosure house?

You should probably make your initial bid at a price that’s at least 20% below the current market price—perhaps even more if the property you’re bidding on is located in an area with a high incidence of foreclosures. If you can pay for the property and any necessary renovations in cash, you’re in an enviable position.

How does a foreclosure affect the value of a home?

Many of the properties that back these loans will end up going through the foreclosure process. A growing body of research shows that foreclosed homes sell at a discount and that foreclosures have a negative impact on the value of other homes that are nearby.

What are the long term consequences of a foreclosure?

A foreclosure occurs when the homeowner has failed to make payments and has defaulted or violated the terms of their mortgage loan. The process can be stressful, embarrassing, and it can have long-lasting consequences, such as: Eviction from your home—you’ll lose your home and any equity that you may have established

How are foreclosures affecting the Massachusetts housing market?

John Campbell, Stefano Giglio, and Parag Pathak studied home prices in Massachusetts and estimated that foreclosure-related sales have prices about 27 percent lower than comparable properties.

What does it mean to be in a foreclosure?

Foreclosure is an often-lengthy legal process when a bank or lender repossesses a home in which the homeowner has defaulted on the payments. The bank takes ownership of the home and then sells it at auction.