A mortgage is a long-term commitment, often requiring 30 years of payments that account for up a third of your monthly household income. Most people will do whatever it takes to make their mortgage payment, including taking low-paying jobs if they unexpectedly lose their employment.
Unfortunately, while many people will fiercely defend their interest in their homes, some people fall so far behind on their mortgages that catching up becomes impossible. Lenders can foreclose by asking the courts to grant them ownership of the finance property. The home that you purchased serves as the collateral for the loan and is therefore vulnerable until you repay the loan in full.
Foreclosure rates tend to help people understand the overall economy and the real estate market. What do the rates in Pennsylvania and across the country currently indicate?
Pennsylvania has seen a surge in foreclosures
After several years of rapid price increases, the housing market seems primed for an adjustment. Some people who purchase their homes at the peak of the market have already found themselves struggling to make their payments on time as rates rise and prices level off or drop.
Nationwide, there has been a significant increase in foreclosure filings in 2022 when compared with 2021. In the first six months of the year, foreclosure filings were up 153% when compared with the same time from the previous year. In Pennsylvania, rates are also up, just not quite as much as the national average. The first six months of 2022 saw a 134% increase in foreclosure filings.
Although Pennsylvania lags behind the nation as a whole, it still has the 20th highest rate of foreclosures, at least based on the first six months of 2022.
Foreclosure is not inevitable when you miss payments
Homeowners need to understand that foreclosure is truly the last resort for many lenders. Even when they initiate foreclosure proceedings, they may happily consider alternative options that allow them to recoup their investment in the property. If you have missed payments, you may be able to renegotiate your loan or defend against foreclosure efforts based on a technical mistake made by your lender.
Tracking real estate trends can help those worried about foreclosure or needing to defend against pending foreclosure efforts.