Is home equity not as important as previously thought when it comes to either causing or curing foreclosures? In a recent study, negative life events, or income shock, was the sole cause of 70 percent of mortgage defaults from borrowers with positive home equity.
In many cases, properties that proceed to foreclosure auction following forbearance and loss mitigation may not appear to have equity. Auction.com data suggests that a transparent pre-foreclosure auction marketplace could help more borrowers selling pre-foreclosure uncover this equity.
Watch the latest episode of Disposition Download to learn if home equity is a foreclosure prevention panacea. In the next episode, Blomquist explores why more distressed homeowners with equity don’t sell their homes to avoid foreclosure and the benefits of a transparent marketplace.