Pandemic-related mortgage forbearance programs are expiring, but hundreds of thousands of homeowners continue to struggle with payments. When loan modifications still don’t help, owners may find themselves at risk of foreclosure. But selling the home, which is likely to have accumulated a lot of equity over the past year, may be a much better option.

However, it’s an option that may be getting overlooked. After all, nearly a third of borrowers who start the foreclosure process have at least 40% equity in their homes, according to recent data from Black Knight, a mortgage software and analytics company.

Home prices are up nearly 20% compared to a year ago, potentially providing more equity to those who do need to sell and pay off their mortgage, CNBC reports.

“While having equity didn’t prevent them from defaulting on their loans, it should provide them the opportunity for more of a soft landing—the ability to sell their home at a profit, satisfy their debt to the lender, and have money left over to give them a chance for a fresh start,” Rick Sharga, an executive at RealtyTrac, told CNBC.

Source: “Thousands Could Soon Lose—or Sell—Their Homes as COVID Mortgage Bailouts Expire,” CNBC (Dec. 2, 2021)