Not long ago we discussed the possibility of debt relief for homeowners whose home equity has increased while the property was in foreclosure. If you are in this situation, then you may be able to stop foreclosure by selling the property at market value. You can read more about the matter in our previous post, "Real estate rebound may render some foreclosures unnecessary."
While positive changes have happened in the real estate market, millions of Americans are still underwater on their mortgages, and according to the database Zillow, millions more are "effectively" underwater.
As of the first financial quarter of 2014, 9.7 million mortgage holders -- that comes to 18.8 percent -- had a loan balance that was higher than the value of the property. Another 18.1 percent had home equity, but the proceeds from a sale would not be enough to cover the related costs and also provide a down payment on a new home. In other words, those mortgage holders are not technically but effectively underwater.
Clearly, if you are in either one of these situations, then you are not alone. Homeowners in Massachusetts and Connecticut have seen more than their fair share of financial troubles during and after the recession. There are legal tools, however, for addressing foreclosure and other debt-related issues.
In Massachusetts, foreclosures are handled in a "non-judicial" capacity, while in Connecticut foreclosure is a judicial matter, requiring court proceedings. You can learn more about the differences between these types of foreclosure at our debt relief website.
Source: The Washington Post, "9.7 million still 'underwater' with mortgage debt, according to online database," May 20, 2014