How We Got Here
You’re Not Alone! There are many people facing foreclosure for many different reasons, including mortgage interest rate changes. Mortgage loans that were made a few years ago, and are now having an interest rate change.
30 Year US Mortgage Rates 1971-2022
The Number & Type of Mortgage Rates to Change Through 2023: The graph above shows the number and type (Subprime, Adjustable, etc.) of mortgage loans expected to change through June 2023. When the interest rates change, the mortgages are expected to become un-affordable and thus continue and compound the housing crisis.
For homeowners, when the mortgage interest rate changes, so does the monthly payment. When the payment becomes to high, homeowners can’t afford the payment and the loan goes into default. The result is a foreclosure filing against the homeowner.
Other reasons that homeowners may fall into default and foreclosure are:
- Loss of Job
- Business Failure
- Damage to Property
- Death of Spouse
- Death of Family Member
- Severe Illness
- Inheritance
- Divorce
- Separation
- Relocation
- Military Service (SCRA relief may be available for active duty personnel)
- Insurance or Tax Increase
- Reduced Income
- Too Much Debt
- Incarceration
Whatever the case, I’m here to help you.
Note: Many people are wondering when will the housing crisis end. If nothing is done, then expect sometime in 2024 for the housing market to stabilize. If homeowner can refinance, sell (including short sale) or modify their mortgage, expect the crisis to end sooner. If the economy improves, this crisis can be mitigated even sooner.