Increases that are predicted to be seen in foreclosures have some of the mind that this will lead to further problems when it comes to underwater homeowners and housing prices as many argue that not only are homes which are sitting empty in the housing market pulling down prices in some areas but there are also those who state that simple foreclosures in an area are leading to decreases in property values as some homeowners are seeing a substantial reduction in their home’s equity. However, there are some homeowners who may have opportunities to avoid foreclosure as many may either participate in various foreclosure prevention options or some may simply be in a position where they can benefit from alternatives to foreclosures like a short sale program.
Major mortgage servicers like Bank of America, Wells Fargo, and J.P. Morgan Chase, just to name a few, all participate in programs such as short sales, deed in lieu of foreclosure plans, and many foreclosure prevention initiatives that may come from a federal or private plan. Reduced payment options have been beneficial for some homeowners in the past, but as more foreclosures are being moved through the system there is evidence that these homes may be in a situation where foreclosure has been delayed for quite some time, and homeowners may have transitioned from their property without benefiting from these assistance opportunities.
Since there are some foreclosures that may be seen in the coming months that have been on deck and waiting from anywhere from a few months to over a year, homeowners who are in a position where negative equity is a problem do need to understand that there are some benefits to be gained from certain opportunities available for those in a negative equity position as recent news that has been circulating has made homeowners aware of negative equity refinancing options, but again there are some homeowners benefiting from opportunities to sell their home at a loss when financial distress in negative equity are in place.
Understandably, homeowners will not always be in a position to benefit from foreclosure prevention plans but if buyers can be found or a mortgage servicer will participate, there are those who may be in a position where options like these short sale programs can help despite the fact that some homeowners have seen a decrease in their credit score as a result. Yet, there are those who argue that a short sale will be much more beneficial in terms of their credit history when helping to avoid other areas of distress that may come as a result of foreclosure or bankruptcy, and homeowners may be able to get back on their feet in a shorter period of time, in terms of restoring their credit.
While this will not necessarily be the case for everyone who uses the short sale plan, as some homeowners have seen missed payments, delinquency, and even default in other areas of their financial life, focusing on foreclosure assistance through either prevention or alternative plans have been helpful for homeowners in the past and as further foreclosures are predicted to potentially lead to more negative equity and housing problems in some areas, homeowners who are currently struggling have been urged to contact their servicer, housing counselors, and simply begin exploring ways that they may find assistance on their underwater home.