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In matters of foreclosure, what a difference a year can make

Ask any comedian and they are likely to tell you that the key to success is that timing is everything. If you tell a joke and don't phrase things just right, it could very well flop. The same might also be said for the process of foreclosure.

Experts in this area of consumer affairs say that by keeping a close eye on home values, being aware of cash flow and developing an appropriate overall strategy, it may be possible to save a home from foreclosure. Various legal options may be available in this regard, including the protections that are offered through bankruptcy.

This information may unfortunately come a little too late for many homeowners in the Dallas area. 

According to RealtyTrac, the real estate information company, there are a growing number of homes that are in foreclosure now that actually have positively equity. That is, they're again worth more than the mortgage amount owed on them.

According to RealtyTrac, the share of homes in foreclosure that enjoy positive equity stood at 35 percent in the first quarter of this year. That was up from 31 percent in the last quarter of 2013 and is more than 10 percent higher than in the third quarter of last year.

Houston is among the top five markets in the country with a large number of foreclosures underway on homes with positive equity. RealtyTrac says that many of the homes in its count involve borrowers who are in the early stages of foreclosure. They may be behind on their mortgage payments but the banks haven't taken possession.

But what may be more disconcerting about this is that many of these homeowners may not even know that their property values are now inching into the black. RealtyTrac says a lot of the homes in foreclosure have already been vacated but it hasn't cross-checked to see how many of the empty homes have positive equity.

Is it too late for a homeowner who may be in a positive equity situation to avoid foreclosure? Each case is different and should be decided individually.

Source: The Washington Post, "More homeowners no longer need to be in foreclosure, and they may not even know it," Dina Elboghdady, April 18, 2014

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