Report: Home Prices Down, So is Foreclosure Crisis Recovery
One of the primary reasons so many Americans endured a foreclosure in the wake of the economic downturn is that so many homes were “underwater.” That is, the homes had been overvalued at the time of purchase (due to the shady practices of banks and complicit appraisers) and homeowners could no longer afford to make the payments – or sell the homes.
The deeper underwater a home is, the tougher it can be to avoid a Miami foreclosure. When home prices started to rise in 2012, many homeowners saw their real estate investments stabilize, and they were able to either sell or take a minor loss. However, home appreciation levels are now slowing and, in some markets, dropping again. That means that once again, we’re going to see an increased risk of foreclosures.
This isn’t to say that a foreclosure is inevitable for someone who is underwater. A experienced Miami foreclosure defense lawyer can assist in helping homeowners negotiate a home loan modification, wherein the principle balance is more in line with the actual value of the property. In the alternative, mortgage services can be challenged on their rights to foreclose, as well as procedural issues that could delay the process until the market bounces back.
The housing market collapse in 2007 left more than 25 percent of all homeowners stuck with an underwater home. Things have improved slightly since then, but analysts with RealtyTrac data systems are projecting that the recovery for those struggling with negative equity is likely going to slow significantly this year.
In the second quarter of 2012, the number of underwater homeowners stood at nearly 13 million, or nearly 30 percent of all properties that still had an outstanding mortgage. Rising home prices have allowed that figure to drop to about 9 million, or roughly 17 percent of all mortgages. (These are folks who owe a minimum of 25 percent more than the estimated value of the property; these homes are three times as likely as others to go into foreclosure.)
It’s worse for those in the hardest-hit states, including Florida. Here, 31 percent of all homeowners remain seriously underwater.
Still, as home prices are increasing incrementally, banks become less willing to take a loss in the form of a short sale. Instead, banks are choosing to wait for the property to appreciate, and then initiate a foreclosure.
Many had hoped that the warmer weather brought by spring would kickstart the selling season. However, the Wall Street Journal reports that fewer people are turning up for open houses. New building permits fell 1.2 percent compared to last year. Zillow reports that approximately 28 percent of home listings have endured at least one price cut in February. That’s up 2 percent from February last year.
Struggling homeowners still have options, though, which should be thoroughly explored with an experienced foreclosure defense lawyer.
If you’re battling foreclosure in Miami or the surrounding areas contact Jacobs Legal for a confidential appointment to discuss your rights. Call (305) 358-7991. Also, don’t miss Miami Foreclosure Attorney Bruce Jacobs on 880AM/the Biz, every Wednesday from 5 p.m. to 6 p.m. on “Debt Warriors with Bruce Jacobs,” discussing foreclosure topics that matter to YOU.