A startling statistic just came up from RealtyTrac, as the real estate market recovers and homes appreciate in value, more and more homes that are in foreclosure have positive equity. Homeowners with distressed properties can avoid foreclosure by selling or refinancing their homes.
It’s natural to be perplexed as to how people with positive equity are facing foreclosure, but it’s all because of the timeline. Two years ago the mass majority of homes were underwater, that is when the homeowners originally fell into foreclosure. However, the actual foreclosure process often takes a few years, thus these homeowners haven’t noticed that their homes now have positive equity.
This is a situation that has recently started rearing its head, so it’s a good time to heed its warning: if you’re facing foreclosure, keep tabs on the value of your home. It’s a good practice to have your home’s value appraised regularly.
Once you establish that your home has equity – meaning it is worth more than what you owe on the mortgage – you will have a couple of options available to avoid foreclosure on the property. At that time you can either sell your home or attempt to refinance.
Increased home values aren’t growing as rapidly in Florida as they are in other parts of the nation, but that just means that you might need to buy some time while you wait for the value of your home to reach your targeted amount. Buying this extra time is difficult without help, particularly if the notice of action has already been filed for the foreclosure. If you find yourself at this stage, we suggest you hire a Florida foreclosure defense attorney. There are various legal tactics that can be used to draw out the case, providing the homeowner ample time to study and assess the home’s value. Once the home has equity various options can be explored.