Many Struggling Homeowners Have the Means to Avoid Foreclosure

Fewer homeowners in the foreclosure process in the 2015 second quarter were seriously underwater – when the remaining mortgage is more than 25 percent higher than the value of the property – according to housing data firm RealtyTrac. The increase in equity for many troubled homeowners may help save some from losing their homes.

During the second quarter of this year, there were 7,44,580 seriously underwater U.S. properties, representing 13.3 percent of all homes with a mortgage. That number is up just slightly from the first quarter figure of 7,341,922 homes, which was a 13.2 percent share of all mortgaged properties. Yet compared with one year earlier, the number of seriously underwater properties fell in the second quarter from 9,074,449 in the second quarter of 2014. Seriously underwater homes then made up 17.2 percent of all homes with a mortgage.

“Slowing home price appreciation in 2015 has resulted in the share of seriously underwater properties plateauing at about 13 percent of all properties with a mortgage,” said Daren Blomquist, vice president at RealtyTrac. “However, the share of homeowners with the double-whammy of seriously underwater properties that are also in foreclosure is continuing to decrease and is now at the lowest level we’ve seen since we began tracking that metric in the first quarter of 2012.”

Only 34.4 percent of all distressed properties – those in some stage of foreclosure – were seriously underwater in the second quarter, a decrease from the first quarter’s 35.1 percent and 43.6 percent in the 2014 second quarter. The states that saw the highest percentage of distressed sales with positive equity were Colorado with 72.0 percent, Alaska at 69.8 percent, Texas at 66.4 percent, Oklahoma with 65.2 percent and Nebraska with 64.4 percent.

For those facing foreclosure who actually have equity in their homes, short-selling or even traditional sales may still be possible. Struggling homeowners should talk with their mortgage lenders and real estate professionals about the possibility of selling or refinancing before giving up their homes to foreclosure.

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on August 6th 2015 in Mortgage News

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