Options for Homeowners to Avoid Foreclosure

Despite recent data, experts unanimously agree that a large-scale foreclosure crisis akin to the one witnessed in 2008 is highly unlikely. While there has been a slight uptick in foreclosure filings, it's important to understand that we remain well below the levels typical of a more stable housing market. According to a report from BlackKnight:

“The likelihood of any significant surge in foreclosure activity in the near term remains low, with start volumes still nearly 40% below pre-pandemic levels.”

This is encouraging news, indicating that the number of homeowners at risk of foreclosure is comparatively low.

However, there remains a small percentage of homeowners who may be grappling with the possibility of foreclosure due to unexpected hardships in their lives, a scenario that can arise in any market.

For those homeowners, there are still viable options to help navigate the foreclosure process. If you find yourself facing difficulties, consider the following avenues outlined in an article from Bankrate:

1. Forbearance Programs: If your loan is serviced by Fannie Mae or Freddie Mac, you may qualify for a forbearance program.
2. Loan Modification: Your lender may be open to adjusting your loan terms to reduce your monthly payments to a more manageable level.
3. Repayment Plans: Your lender may offer deferral or payment plans if you're struggling to meet your payment obligations.

Additionally, it's worth considering whether you have sufficient equity in your home to facilitate a sale and safeguard your investment.

Utilizing Equity to Sell Your Home

In today’s real estate landscape, many homeowners possess more equity in their homes than they realize, owing to the significant appreciation in home prices observed in recent years. This means that if you've owned your home for some time, its value may have appreciated substantially. Moreover, the mortgage payments made over time have likely reduced your loan balance, further boosting your equity. If your home's current value exceeds the outstanding loan balance, you may leverage this equity to your advantage. Freddie Mac elucidates:

“If you have enough equity, you can use the proceeds from the sale of your home to pay off your remaining mortgage debt, including any missed mortgage payments or other debts secured by your home.”

Rely on Expert Guidance to Explore Your Options

To ascertain the extent of your equity, collaborate with a local real estate agent who can provide an estimate of your home's potential selling price based on recent comparable sales in your area. Selling your home may offer a viable solution to avoid foreclosure.

In Conclusion

If you're a homeowner facing adversity, seek guidance from a real estate professional to explore available options or consider selling your home to circumvent foreclosure.