Is This The Last Chance For Homeowners To Modify Loans?

Is the window of opportunity for homeowners to save their homes finally closing for good?

The market is changing and taking the housing market along with it. And banks and mortgage lenders are changing their attitudes for dealing with nonperforming borrowers. Help for distressed homeowners has been plentiful for a number of years, but there may be few lifelines left after the next few weeks.

Foreclosures

There are still thousands of homeowners in default and in the midst of foreclosure across America. New changes in the economy could put more homeowners in default in the near future. Most are no longer underwater on their mortgages. However, rising interest rates may lift monthly payments again, while making everything else from coffee to groceries to car payments more expensive at the same time. Some borrowers have escaped making house payments for years, while others just managed to hang on. Either way the courts are now free of their backlog of cases and are prepared to process foreclosures more quickly.

Interest Rates

Interest rates have already been going up. Looking at historical rates it isn’t unreasonable to believe they could eventually double, triple, or go even higher. We’ll at least see more interest rate hikes this year, and probably until the next bubble bursts. Higher rates make it harder to qualify to refinance, get home equity loans, or to buy new homes. The longer people wait, the fewer options they’ll have, and any modification of their loans will be at a higher rate.

Banks Bullish on the Market

Banks dragged their feet in foreclosing or auctioning off homes for a variety of reasons. Courts were full, they didn’t want to take losses, and the resale market was tough. In January though, home sales hit a new ten year high. With home prices pushing new highs in some areas, properties are selling fast. Limited note inventory means banks can sell off the bad paper quickly too. So, they are pushing auctions through, selling off their REOs, and handing off delinquent loans to other investors who are often hungry just to clear the property and flip it for a quick profit. Gone are the days of easy short sales and loan modifications, or staving off lenders for months on end. At least for the most part.

Investment Opportunities

Find out more about investing in secured debt and real estate, go to NNG Capital Fund

Image by Omar González from Pixabay