In a recent Reuters article, defaults on second mortgages will likely trigger another round of foreclosures.
Homeowners who took out home equity lines of credit during the housing boom are increasingly missing payments. This trend could continue as the time when homeowners will have to start paying the principal down on those loans is fast approaching. Approximately 40% of HELOCs could be affected with a staggering sum of $220 billion.
The housing bubble and its aftermath is still affecting consumers and their families today. As HELOC payments in the billions of dollars jump, consumers still facing a soft job market or stagnant wages won’t adjust to the increased payments demanded by the Banks.
The Banks too may see their profits eaten away by HELOC loses. Banks aggressively offered these loans to consumers in the heyday of the housing market without much regard to borrower’s ability to pay but as the economy limps along they are getting nervous. The housing market everyone claims is reviving, is still on life support.
If you are delinquent on a HELOC or know you will face a delinquency in the near future, speak to a qualified bankruptcy lawyer about your options, including a lien strip.
At Parker & DuFresne, P.A. our experienced bankruptcy lawyers can review your entire financial picture and provide you with options before your HELOC resets.