Foreclosure is the most dreaded word for homeowners or owners of any property. The reason being manifold, besides the financial impact, the socio-economical aspect, it also impacts the wellbeing of the affected person and their families who are directly/indirectly party to immense sufferings.

The scenario is worst in the state of Florida where there are floods of foreclosure applications somewhere in the range of 290000 + cases running in the Florida courts. The state judiciary can play a mediators role to a certain extent however the borrowers would also be willing to settle the issue somehow instead of dragging it on with mala fide intentions. The lenders are also suffering in terms of loss on investments and money blockades.

Financial analysts and welfare organizations are yet to churn out a winning solution for this malady. Florida bankers associations have opined that those borrowers who have the means to pay should genuinely make the necessary efforts to do so in the greater interest of all and sundry.

Some of the common questions popping up on Foreclosure are:

What leads to Foreclosure?

There are several reasons Foreclosure happens, the most common are listed below:

• Sudden Loss of Employment-Due to the recession and the downsizing of companies, the pertinent issue of lack of steady income of the borrower and hence inability to make timely payments.
• Split-Up/Divorce/Separation-Where jointly owned properties are concerned and owing to the split up, one of the spouse who has to foot the bill is unable to do so on the steam of his own financial/income capabilities for the house payments.
• Emergency unplanned financial constraints, putting a strain on the monthly out flow of home loan repayment
• Bankruptcy/Insolvency: Sudden financial crisis due to debt financing or asset stripping due to unavoidable reasons.

What are the downside effects of Foreclosure?

Foreclosure has more far reaching consequences than can be ascertained from the financial point of view, it means more than losing just a home or a property. More serious and drastic problems that may result due to foreclosure are indicated below:

• Loss of equity or tangible growth on your home. The value of your property would have increased manifold under normal circumstances, so the cumulative losses could run into thousand of dollars.
• The tax liability increases in such circumstances, as the lender who has lost his money has to notify the IRS with regards to the sales of the foreclosed home and must report the loss component too. Vice Versa the IRS may require that you report the lenders loss as your profit and pay the accrued tax on it.
• The credit ratings on the personal front will go for a toss as in future you will be listed as a defaulter on payments and your credit report will have a negative aspect to it, making it near to impossible for you to make fresh borrowings on future loans if any for at least 7 years or so.
• Another horde of issues will be cropping up like inability to rent an apartment, limited employment opportunities and a host of other implications, besides social ostracizing.
• Lawsuits. The mortgage company can initiate lawsuit procedures to recover their damages.
• Loss of employment. In some cases employers require their employees to maintain good credit histories. Upon coming to know about the Foreclosure notifications, they can use it as grounds for dismissal or a loss for career enhancement and better pay grades.
• Loss of self-esteem and self-worth. Emotionally the stress of foreclosure can have serious implications on your general well-being. The stress that foreclosure brings can lead to depression, feelings of worthlessness, lack of motivation, embarrassment around family and friends, and the woes are never ending.

Some of the suggested remedies or solutions for Foreclosure affected person/s is counseling, especially the loss mitigation counselor. The tacit guidance of a loss mitigation counselor can steer the borrower in the correct directions by suggesting certain time tested measure to get out of the dicey situation such people are in.