Current Home in Foreclosure - Want to Buy Another

Reader Question: I have a home that just went into foreclosure. I have moved into a house that I would like to finance in the future. How long will I have to wait to get it financed after foreclosure on another home?

Somebody asked a very similar question about three weeks ago, so that's worth a read. Of course, a lot has happened over the last three weeks. More banks are struggling, more bailout issues, foreclosure rates are still soaring, etc. The economy is in a tremendous state of flux right now, so it's hard to say how long you might have to wait. It could be a long time, given the foreclosure issue. Banks are not making loans to anyone they deem risky right now.

Did you talk to your current lender about ways to avoid foreclosure? I'm not sure where you are in the process, but many lenders have "workout programs" for avoiding foreclosure altogether. A repayment plan is one of those options, and there are others as well.

If you're past that point, and foreclosure is inevitable, there's not a lot I can tell you. I wish I could! It's just a really tough time right now, so predictions are out the window. My advice is to work on improving your credit score as much as possible in the meantime. A home foreclosure will lower your credit score some, so you want to build it back up over time.

I think eventually, when some of the "dust" has settled from this current mess we are in, banks will be somewhat forgiving toward foreclosure victims. After all, the lenders themselves have some blame in this mess. So if you can work on improving your credit to show that you're not a risk to lenders, they may be willing to "forgive" the foreclosure in your history.

I just can't predict -- or even guess -- how long what will take. I'm not sure anyone can right now. I don't know how much help I was, but good luck anyway!