It is estimated that most american families can only maintain their current living expenses for 60 days or less when income is interrupted for any reason.
Payment Increase or Mortgage Adjustment
This is the single largest reason for distress in today’s market; waiting and doing nothing. Call me, Tony, and see what your options are. If we can short sale your property, you will have saved your credit and stopped other creditors from calling and harassing you.
Loss of Job
When an individual loses employment, the loss of income is most often immediate. Financial distress can quickly occur; seeming almost insurmountable.
For a small business owner, the devastation of a business failure is often followed by the inability to pay mortgage payments and the loss of their home.
Damage to Property
Many times insurance companies do not cover the full amount of damage to a property and homeowners are unable to make repairs. Some homeowners have to use insurance funds to survive and find new living arrangements.
Death of a Spouse
The death of a spouse is devastating to a family, and if the deceased was the only person earning wages, this will almost always cause financial distress.
Death of family members
The death of family members, regardless if they are a wage earner or not, can throw a family into emotional and financial turmoil.
Severe illness, the medical bills involved, and the time that it takes away from a family’s productivity can cause bills to be missed and homes to go into distress.
Rarely does someone think of an inheritance as a means for distress. However, heirs are left to pay mortgage bills, utilities and maintenance that they did not expect. Imagine a son who makes $60,000 a year whose parents pass away and leave him with a $700,000 mortgage and payment on a $1.5 million property. He will quickly need to find a payment solution (which there may not be) or liquidate the property and satisfy the mortgage. As you can see, even properties with significant equity can be in danger of being lost to foreclosure if a solution is not implemented.
Goes without saying that divorce is one of the most common reasons for financial distress in the real estate market.
When a couple decides to separate even though they are not actually divorcing, the cost of maintaining two households can cause the loss of a primary residence.
Homeowners do not always have control over where they live; many relocations are necessities not choice. This can quickly cause unexpected distress since very few homeowners can support two households for any significant length of time.
In some cases, service persons who have had their periods of active duty extended are suffering a tremendous amount of financial pressure.
Insurance or Tax Increase
For many homeowners just the increase in taxes on an annual basis or the increase on an insurance payment can cause a family to lose a home or go into financial distress.
If a person is in a commission based business and the economy suffers, often times their income suffers. Also many companies are reducing employee compensations to make up for lost revenues that corporations have suffered.
Too much debt
For a family with credit card debt, even minor increases in their interest rates can make the difference between paying all their bills and missing payments.