85% Foreclosure Rate?

I’m working with more home and condo owners to help them avoid foreclosure but didn’t realize how widespread the problem is and how few in this situation actually do get help.

In an article I read today I saw this line which really made it clear how important it is to help home and condo owners in mortgage trouble:

Last year, roughly 85% of homes worth up to $1 million that received default notices were eventually repossessed, according to RealtyTrac, which tracks real-estate data.  Full article on MarketWatch.com

There really is no need for this many people to have to go through a foreclosure when there are quite a few other options open and banks are trying to prevent foreclosures in as many cases as possible.

The problem is that most homeowners don’t know that they have options, don’t know where to turn, are given bad advice, or don’t seek out help due to fear or embarrassment.

For luxury homeowners, banks especially want to avoid foreclosure:

For lenders, it’s worth the extra effort to avert foreclosure on luxury properties. They incur substantial expenses holding these homes, including paying property taxes, maintenance costs and, often, homeowners’ fees. The homes are also more difficult to sell, since fewer buyers can afford to purchase them. And when lenders eventually unload them, it’s often at a loss.  Full article on MarketWatch.com

Both luxury and non-luxury homeowners can even get a check at closing from their lender as a ‘relocation assistance’ if they qualify:

Separately, some lenders will encourage owners to consider a short sale. Armando Tiongson Jr. of Rockaway, N.J., says Bank of America recently offered him and his wife up to $30,000 in cash to sell their 4,100-square-foot home, which they purchased for roughly $1 million in 2006, in a short sale. Tiongson, an IT program manager, says he and his wife haven’t paid their mortgage in 18 months after the monthly payments on their loan, which initially required just interest payments, spiked. By offering this cash in exchange for a short sale, Bank of America says it can reduce the losses that would kick in if the loan goes to foreclosure. (The bank adds that it has been making such cash offers to homeowners of all loan levels since last year.)  Full article on MarketWatch.com

Here is more information on these Cash Incentives from Banks for Short Sales.  And here’s an example of how well things can go for a homeowner in this situation when a short sale is handled the right way.

There are many people who owe more on their home or condo than it is worth and don’t know what to do. If you are in this category or know someone who is, there is no reason to have the situation go unresolved and end up in a foreclosure when there are alternatives that could prevent it.

I’m here to help so don’t hesitate to call or email me for assistance and let’s see if we can get that 85% down to a much lower number!