What should American homeowners do when facing foreclosure?
2020 was unprecedented for everyone and even as we start off 2021 our way of life is still not back to normal. The global pandemic and its effect on everyone’s ability to go about their business, is still affecting lives. The government intervened with various programs and protections to provide relief to people and businesses alike. Such programs have and will run their course and not be repeated.
Sadly, for many homeowners paying their mortgages or rent became understandably, secondary to feeding their families. Government programs were put in place to protect both the homeowner and the lenders during this period of uncertainty. Many of those programs have expired or will no longer be in place in the next few months.
What does this all mean…? It means it is more important than ever for those homeowners to be talking to their lenders and landlords about their options. If you have already been talking to your lenders or landlords, congratulations… While there are no guarantees, if you avoid talking to your lenders or landlords, evictions and/or foreclosures are guaranteed. It is widely expected the number of foreclosures and evictions is going to rise sharply in the coming months and will continue throughout 2021.
So what options are left for struggling homeowners who find out they don’t have long before their auction date?
- Refinancing – works if you have income and good credit
- Loan modifications – works if you have income and equity
- Hiring a foreclosure defense attorney – getting sound legal advice could help
- Short sales – needs a buyer and bank approval, will affect your credit and ability to borrow in the future
- Finding an investor and selling your home fast for cash – works best if you have equity in the property
- Bankruptcy – normally last resort
I will leave you with this final thought, the sooner you explore your options, the better informed you will be when trying to decide your next steps during this distressing time.
