Foreclosure...For Real!

Locked Out was the headline in the Tuesday, January 15, 2008 edition of the H-T.

The subtitle says “While Hoosier foreclosures climb to second in the nation, Monroe County bucks trend”

This article discusses how our local home owners are “escaping foreclosure by the skin of their teeth” which is true in many cases. We are seeing people avoiding foreclosure but that does not necessarily mean that they are keeping their homes. While the numbers are not readily available, it would be interesting to see how many mortgage companies are accepting a deed in lieu of foreclosure.

If you are unfamiliar with this language, let me explain. When foreclosure is eminent a lender will often negotiate with a home owner for the home owner to sign over the deed to the home to the lender, who in exchange will not proceed with the foreclosure suit seeking a judgment against the home owner.

Over the past year I have sat with many people who need to sell their homes because they can’t make the payments. In most cases they are already behind, they have little to no equity in the home and while they are with me they learn that they can’t sell their home because they owe more on it than what it will bring. They can choose to stay put until the courts tell them otherwise or end the attorney costs and sign the deed over to the bank without a fight. While the foreclosure numbers show that we are ‘bucking the trend’ I have to wonder how true that is. I believe if we knew the rest of the story we might have a less optimistic report.