Homeowners Can Explore Alternatives to Prevent Foreclosure

Despite the latest data, experts agree that a large-scale foreclosure crisis similar to the one in 2008 is improbable. While there has been a small rise in foreclosure filings highlighted in recent reports, the overall numbers are still much lower than what would be expected in a normal year for the housing market, as explained in a report from BlackKnight.

"The likelihood of a near-term increase in foreclosure actions remains minimal, with initiation volumes still almost 40% lower than the levels seen before the pandemic."

This is encouraging information, indicating that the count of homeowners facing risk is significantly lower than what is typically observed.

However, a small proportion of homeowners might be confronting the possibility of foreclosure. This situation arises when some homeowners experience unforeseen difficulties in their lives, a circumstance that can occur in any market environment.

For such homeowners, there are alternatives available that could prevent them from undergoing the foreclosure process. If you're encountering challenges, Bankrate provides an article that outlines various options worth considering:

• Explore Forbearance Programs: If your mortgage is backed by Fannie Mae or Freddie Mac, you might be eligible to apply for such a program.
• Request a loan modification: Your lender might agree to alter the terms of your loan, aiming to reduce your monthly payments to a more manageable amount.
• Arrange a repayment plan: If you're currently unable to make your payments, a lender might be able to establish a deferral or payment plan for you.

?Additionally, it's worth considering if you have sufficient equity in your home to sell it and safeguard your investment.

Leveraging Your Home Equity to Sell Your Property

In the current real estate market, numerous homeowners possess significantly more equity in their homes than they might expect, thanks to the swift appreciation in home values witnessed in recent years. If you've owned your home for some time, it's likely that its value has increased. Additionally, the mortgage payments you've made have contributed to reducing your loan's balance. This combination could have enhanced your equity. Should the current value of your home exceed the remaining amount on your mortgage, you might be in a position to leverage this increase to your benefit. Freddie Mac outlines the advantages of this scenario:

"If your equity is sufficient, you can utilize the funds from selling your house to settle any outstanding mortgage balance, including any overdue mortgage payments or other debts linked to your home."

Seek Guidance from Experts to Understand Your Alternatives

To determine your home's equity, collaborate with a local real estate agent. They can provide an estimate of your home's potential selling price by comparing it to recent sales of comparable properties in your neighborhood. This strategy could enable you to sell your home as a means to avert foreclosure.

Bottom Line

If you're a homeowner experiencing difficulties, seek the advice of a real estate expert to examine your options or determine if selling your home could help you prevent foreclosure.