Mood of the Market
There are several government reports out now stating that most homeowners who lose their home to foreclosure never contact the bank to determine whether they can work something out with them, despite the ubiquitous government, bank and media education campaigns encouraging them to do just that.
While I'd wager that a small portion of this number are strategic defaulters who plan to walk away from the home in any event because of its deep negative equity, the vast majority are folks who have lost a job, seen their business income decline during the recession and/or had their payment adjust steeply upward sometime over the past couple of years, and have simply fallen behind on the payments.
Simply ignoring the bank's calls and letters does not just get a distressed homeowner out of a hard conversation or two; the ultimate results of this plan of inaction include losing the property to foreclosure and bank repossession, including eviction and having to find another place to live.
Could those things happen anyway, even if you do reach out to the bank? Absolutely. But there are still millions of homeowners every year who are able to save their homes, under a bank or government loan modification or refinance program, or even amicably agree to a less traumatic surrender of the property than foreclosure, by short-selling the property or negotiating a deed-in-lieu of foreclosure.
It only makes sense to try.
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