Foreclosure Trends: Where Do You Stand?

By Karen Lawson
Mortgage Credit Problems Columnist

Foreclosure continues to trouble US homeowners. In July 2008, 77,295 homes were lost to foreclosure. Financial institutions are struggling with bloated inventories of repossessed homes, and the number of foreclosures is negatively impacting real estate markets throughout the nation. If you're facing foreclosure, or are contemplating a choice between letting your home go into foreclosure and meeting your living expenses, attempting to avoid foreclosure can help you save your credit, your home, and help  preserve your neighborhood.

What is Your Home Worth?

It's important to determine the value of your home. Home worth can help you decide whether you can keep your home, access home equity to consolidate debts, or find alternatives to foreclosure. Although you can get free estimates of value online, it's best to have a local real estate professional evaluate your home. They are familiar with local market conditions, what buyers are looking for, and comparable sales in your area. A local broker's opinion of value is the starting point for your next steps.

Avoid Foreclosure: Should You Stay or Should You Go?

If you've lost your job or are facing catastrophic financial losses due to injury or illness, you have to sell your home. If you're having problems making mortgage payments, you need to know the source of the problem. If you owe too much on credit cards, and have little or no equity in your home, you may be able to get debt help from credit counseling agencies. Credit counseling can help you arrange affordable repayment to creditors and help you establish an affordable cash based budget.

If you have enough equity in your home, you may be able to borrow enough to consolidate consumer debt at a lower interest rate. Eligibility depends on how much equity and income your have, and your recent credit history. Home equity loans and mortgage refinancing are great options if you can afford higher mortgage payments, but they work only if you're committed to avoiding consumer debt. Your mortgage lender may also offer modification of loan terms or other methods to help you avoid foreclosure. Call them today.

If You Must Sell

If you can no longer afford your home, call your lender and ask for permission to list your home for sale at or below market value. If your lender agrees, they may accept the proceeds from the sale of your home as full satisfaction of your mortgage debt. Speak with a financial or tax advisor to determine additional liability as individual circumstances can vary.

Source:
Nation's Foreclosure Plague Widens

About the Author
Karen Lawson is a freelance writer with more than fifteen years of experience in mortgage banking. She holds an MA degree in English from the University of Nevada, Reno.

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