Friday, March 25, 2022

Foreclosure Rates Begin Rising in America Again

During much of the COVID-19 pandemic, homeowners did not have to worry about losing their homes to foreclosure as a result of forbearances from federal mortgage services and banks across the country. Many economists and consumer protection advocates predicted, and worried, that the end of foreclosure forbearance periods would result in a marked increase in foreclosure activity across the country. Prior to foreclosure forbearances expiring, an article in Forbes highlighted the “hotly debated foreclosure wave” and discussed the possibility that homes across the country would indeed go into foreclosure. As that article explained, by the end of September 2021, “nearly three-in-four loans (1.2 million loans) in forbearance reached the 18-month maximum limit as of the end of September.”

A recent report from MarketWatch suggests that the beginning of that foreclosure wave may have begun. What do you need to know about rising foreclosure rates in America?

Foreclosure Rates Have Increased Significantly in the New Year

For many months, commentators have been anticipating that foreclosure rates in the U.S. would rise. According to the MarketWatch report, that increase may have started in the New Year. As that report explains, the month of January saw “a seven-fold increase in foreclosure starts as compared to December, with roughly 33,000 loans referred to foreclosure.” In addition, repossessions through foreclosure rose by 70% between February 2021 and February 2022.

The report suggests that the recent rise in foreclosures is evidence of how “many of the regulatory protections implemented during the pandemic to help Americans stay in their homes are starting to wear off.” While a large percentage of foreclosure forbearances have expired for homeowners, it is important to know that many homeowners are still in forbearances in 2022, and those homes could also ultimately go into foreclosure once the forbearances end. Unless a significant economic improvement occurs, the report suggests, struggling homeowners are likely to face foreclosure.

Options to Avoid Having a Foreclosure on Your Credit Report

Facing foreclosure does not have to mean that your home goes through the foreclosure process and that you have to deal with the credit report effects of a completed foreclosure or the possibility of owing the bank significant amounts of money as a result of an underwater loan. Many different foreclosure defense options may exist, and many of them might allow you to avoid owing anything further to the bank. Our firm can help you with:
  • Short sales, which allow you to sell the house, repay the bank the sale price, and negotiate with the bank to avoid a deficiency judgment related to any remaining debt owed on the property;
  • Deed in lieu of foreclosure, in which you sign the property over the bank and negotiate to avoid having the bank come after you for debt owed by getting a deficiency judgment; or
  • Consent judgment (also known as a consent foreclosure), in which a home owner gives up rights to the home and a foreclosure is completed, but the homeowner is not subject to a deficiency judgment.
Contact Our Oak Park Foreclosure Defense Attorneys

If you have questions about avoiding foreclosure with a short sale, a deed in lieu of foreclosure, or a consent judgment, you should seek advice from an experienced Oak Park foreclosure defense attorney at our firm. Do not hesitate to get in touch to find out more about preventing a foreclosure from affecting your credit report. Contact the Emerson Law Firm for more information about foreclosure defense options in Illinois.

See Related Blog Posts:

Illinois Court Denies Borrower Appeal Concerning Foreclosure Sale

What are the Steps for a Deed in Lieu of Foreclosure?