Refinancing Possible For Some Facing Foreclosure

If you’re a homeowner struggling to make your mortgage payments, rising real estate prices may help you avoid foreclosure.  It’s possible that you may be eligible to refinance because your home increased in value in recent months.

RealtyTrac’s  U.S. Home Equity & Underwater Report, for the first quarter of 2014,  shows that 9.1 million U.S. homes were seriously underwater. That means these homeowners owed at least 25 percent more than the value of their homes.

And the description fits about 17 percent of all homes with mortgages. It sounds bad. But the number is down from a high in  2012 when 29 percent of all homes with mortgages were underwater. And that brings us to the good news.

It turns out that many homeowners who thought they couldn’t hang on may now be eligible for refinancing, according to Daren Blomquist, vice president at RealtyTrac.

Blomquist says,  “The relatively high percentage of foreclosures with equity is surprising to many because it would seem homeowners with equity could easily avoid foreclosure by leveraging that equity by refinancing or with an equity sale of the home.  But many distressed homeowners with equity may not realize they have equity and in some cases have vacated the property already, assuming that foreclosure is inevitable.”

Some areas of the country are doing better than others. Prices have gone up in the California cities Los Angeles,  San Jose, and San Francisco, Poughkeepsie, New York, Honolulu, Hawaii. In those areas, fewer mortgage holders are underwater than elsewhere.

The real estate market remains depressed in Las Vegas, Nevada and Florida communities Lakeland, Palm Bay-Melbourne-Titusville, Cleveland and Akron, Ohio  and Detroit, Michigan. These areas have the largest percentage of homeowners with underwater mortgages.

 

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Barbara Nevins Taylor

As the winner of 22 Emmy Awards and a slew of journalism honors and awards, I created ConsumerMojo.com to give you the straight story about complicated stuff. Tell us what you want to know and we'll get you the answers.