For many people, owning a home is part of the American dream - right down to the white picket fence. When your home begins to lose value because of the downturn of the economy or any other reason, that dream can easily be shattered. For some Illinois homeowners, having to cope with an undercover mortgage is a sad reality that might be compounded by other financial difficulties. Illinois currently ranks third in the country for the number of deeply underwater mortgages that are in the process of foreclosure.
According to RealtyTrac, a deeply underwater mortgage is one in which the homeowner owes at least 25 percent more than the home is worth. The study included only homes that were in foreclosure. Illinois currently has 61 percent of foreclosed homes that fall under the deeply underwater classification used in the study. Nevada and Florida are ranked first and second respectively. In total, 15 states have a larger percentage of deeply underwater foreclosures than they do foreclosures with equity.
With the upswing of the economy, some homeowners are likely going to find that the equity in homes will start to increase. For some people who are facing foreclosure, an increase in the equity of the home might prove to be a factor that enables them to take measures to keep the home. For others, exploring other avenues to stop foreclosure, such as Chapter 13 bankruptcy, might be necessary. Anyone who is facing financial difficulties, even without foreclosure being a factor, might be able to find debt relief options by claiming protection under one of the personal bankruptcy codes.
Source: The Washington Post, "In 15 states, deeply underwater foreclosures still reign" Niraj Chokshi, Jan. 13, 2014