In spite of this, there's many reasons we won’t see a increase in the number of foreclosures like we did during the housing crash over 10 years ago.
The Government Learned a Lesson the first timeDuring the previous housing crash, the government was slow to recognize the challenges home owners were having and waited too long to send relief. Today, action is being taken as quick as possible. Just in:
Homeowners Learned their Lesson the first timeWhen the housing market was going strong in the early 2000s, home owners gained a large amount of equity in their homes. When prices dipped, many found themselves in a negative equity situation (where the mortgage was greater than the value of their homes). Some just walked away, leaving the banks with no other option but to foreclose on their homes. Today, the home equity situation in America is very different. From 2004-2007, homeowners cashed out $824 billion worth of home equity by refinancing. In the last three years, they cashed out only $232 billion, less than one-third of that amount. That has led to:
Even if prices lessen (and most experts are not predicting that they will), most homeowners will still have vast amounts of value in their homes and will not walk away from that money.
These are not going to be easy times. Though the lessons learned from the last crisis have Americans better prepared to weather the financial storm. For those who can’t, there will be help!