Homeowners today have a range of options available to them to navigate potential foreclosure scenarios

While recent data indicates a slight increase in foreclosure filings, experts reassure that we are far from the large-scale crisis witnessed in 2008. According to a report from BlackKnight, foreclosure start volumes remain significantly below pre-pandemic levels, offering reassurance to homeowners.

Nevertheless, some individuals may find themselves confronting the possibility of foreclosure due to unforeseen hardships. For those in such circumstances, there are avenues to explore that could help mitigate the risk. Bankrate suggests several options worth considering:

1. Forbearance Programs: Homeowners with loans from Fannie Mae or Freddie Mac may qualify for forbearance programs, providing temporary relief from mortgage payments.
2. Loan Modification: Lenders may be open to modifying loan terms to make monthly payments more manageable for struggling homeowners.
3. Repayment Plans: Lenders may offer deferral or payment plans to assist homeowners who are unable to meet their current payment obligations.

Additionally, homeowners should assess whether they have accrued sufficient equity in their homes to consider selling as a means of safeguarding their investment. In today’s robust real estate market, many homeowners may possess more equity than anticipated, thanks to significant home price appreciation in recent years. This equity, coupled with mortgage payments reducing the loan balance, could offer a lifeline to those facing foreclosure. Freddie Mac outlines the potential benefits:

“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.”

To determine the extent of their equity, homeowners are encouraged to consult with a local real estate agent. These professionals can provide insights into the current value of the property based on recent sales in the area, potentially enabling homeowners to sell their homes and avoid foreclosure.

In conclusion, homeowners experiencing financial hardship should seek guidance from real estate professionals to explore available options, including the possibility of selling their homes to avert foreclosure.