229 National Financial Literacy Month - Day 22 - Mortgage Foreclosures & You

The Great Recession that took place in 2007-2009 was more devasting than any time in American history. Home foreclosures are lower than they've been in nearly a decade. While that's certainly reassuring, the U.S. is still averaging more than one million foreclosures each year. 

In 2021, the share of housing units with a foreclosure filing was 0.11 percent. Foreclosure results when a homeowner fails to pay their mortgage payments on time, so the lender evicts them from a said property and takes control of it. The foreclosure rate reached its peak in 2010, just after the financial crisis of 2007-2009. Since then, the rate has steadily fallen. As the coronavirus (COVID-19) unfolded, the government imposed a foreclosure moratorium, a mortgage forbearance program, and mortgage servicing guidelines which was the reason for the low rates recorded in 2020 and 2021.

If you're the owner of a property that's facing the prospect of foreclosure, it's critically important to take immediate action to rectify the situation. Ignoring the situation - or reacting too late - is the worst possible course of action. Banks do not want you to default on your house, so workarounds are provided, thus it is important to open up lines of communication with your lender.

If you miss mortgage payments over a 90-day and or three-month period of time, you will be receiving notices from your lender, do not ignore the information you receive. Reach out to your lender, contact a counselor at the Department of Housing and Urban Development and work out a loan modification, repayment, and or refinance your property.

Facing a foreclosure is one of the most difficult experiences any homeowner can endure. By taking early action to address the situation, you can put yourself in the best possible position to save your home - or at least walk away with minimal damage to your credit score.

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