A recent Newsweek poll reveals that nearly six out of every 10 Americans are either “very” or “fairly” concerned that the U.S. housing market is going to crash within the year. Certainly, the nation’s economic news is not particularly bright, especially because the nation’s top leaders have not yet resolved serious budgetary and debt ceiling concerns. However, there are other reasons why both aspiring homebuyers and current homeowners hoping to sell soon are getting concerned.

For example, one recent Business Insider feature is entitled “The Housing Market’s Ice Age,” and its subtitle reads, “If you don't already own a home, you're going to be screwed for years to come.” The piece concerns the fact that, in much of the country, higher prices, lower inventory, and fewer sales are freezing the market over. It would be difficult to NOT be concerned about the state of the residential real estate market after reading comments like that from a trusted source. The question then becomes, how do those who hope to buy or sell a home over the next few years navigate current and likely conditions successfully?

The Housing Market Is Not a Monolith

Another recent headline – this one trumpeted by both Fortune and Yahoo Finance – should give home buyers and sellers a better sense of how to manage the current and likely future state of the market. This headline reads, “Zillow Just Got Super Bullish on These 37 Housing Markets.” This headline underscores the reality that the housing market is not a singular entity. The market conditions that affect one state, city, neighborhood, or section of a block will not always apply to every – or any! – other area.

Oftentimes, it is possible for homeowners who want to save the equity they have invested in their homes to avoid foreclosure, even if they have missed multiple payments. Speaking with an attorney about their options is usually a good place to start “fighting back” against the risk of foreclosure. Yet, there are times when fighting back against this risk might not be in a homeowner’s best interests. Due to the nature of their circumstances, engaging in a so-called consent foreclosure may be preferable.

Safeguarding the Interests of Homeowners in Specific Ways

In the event of a “traditional” judicial foreclosure, a home is sold by a lender that is owed repayment for a home loan that is in default. The former owner of that home is usually responsible for repaying any outstanding amount owed to the lender. If the lender does not receive this repayment, it may seek a deficiency judgment. To enforce that deficiency judgment, the lender may seek to garnish the former owner’s wages or even seize the contents of their bank account.

If a homeowner no longer wants to be burdened by their mortgage obligations or simply cannot avoid a foreclosure, they may be able to avoid the risk of a deficiency judgment and the challenges of repaying the amount they still owe their lender through a consent foreclosure.

The real estate market is not a static influence. It ebbs and flows nationally, at the state level, locally, and even within neighborhoods on a fairly regular basis. The constantly changing nature of the market means that some aspiring buyers, aspiring sellers, and current homeowners do not care to “keep up” with how the market is trending. Some find this effort to be too complicated and frustrating to be worth their time. Others assume that what will be will be. Yet, it remains important to understand what the market is doing so that anyone who is interested in engaging in a real estate transaction – or keeping their home safe from a risk of foreclosure – can better protect their interests.

What Is Going on?

Uncertainty is not a pleasant reality when individuals are looking to buy, sell, or effectively maintain real estate. Unfortunately, the current housing market in Illinois is being widely cited as among the most vulnerable in the U.S. Essentially, communities are suffering from a high risk of multiple foreclosures due to a variety of factors. This reality affects buyers, sellers, and owners alike. The challenges of this situation have cooled the market and may, in time, effectively chill it.

What Can Buyers, Sellers, and Owners Do?

Generally speaking, it is a good idea to seek legal counsel when buying, purchasing, or trying to save one’s interest in real estate when the market is not strong. Many real estate agents are knowledgeable professionals who provide valuable services. Yet, most real estate agents are not legally trained and, therefore, cannot advise buyers, sellers, and owners of their rights and options like a lawyer can. By seeking personalized guidance, individuals can better protect their unique interests when the market is vulnerable and could shift at any time and the “ordinary rules of play” may not apply.

All too often, homeowners are under the impression that there is no way to respond to a foreclosure notice effectively. They assume that if their lender has announced its intention to foreclose upon a property, nothing more can be done. In truth, the foreclosure process involves a complex series of steps. At virtually any point during the foreclosure process, a specific kind of response from a homeowner has the potential to yield positive results.

This is one of the reasons why it is so important to seek legal guidance if a homeowner’s investment is in jeopardy due to non-payment of mortgage obligations. There are so many checks and balances built into the system that there is almost always a way to remedy a foreclosure risk, regardless of how many steps forward a lender has taken in pursuit of repossessing someone’s home. Some of these opportunities exist because of safeguards within the legal system. Others exist simply because most lenders like to avoid foreclosure whenever they can.

Why Reaching a Solution Is Ideal for Everyone

Obviously, avoiding foreclosure is an ideal outcome for homeowners who wish to remain where they live and to protect the investment they have made by building up equity in a particular property. Thankfully, avoiding foreclosure is usually the outcome preferred by lenders as well.

When a homeowner is at risk of foreclosure, there are a number of ways that they can potentially respond. If their finances are solid but repayment could be made more manageable via a loan modification, this adjustment could mitigate the issues that led to missed payments in the past. Other homeowners file for bankruptcy to catch up on missed payments or pursue short sales to avoid foreclosure when they can no longer afford to remain in possession of their property.

Under a very specific set of circumstances, there is one additional opportunity that makes sense for some individuals who can no longer afford to remain homeowners. This opportunity is referred to as strategic default. It involves intentionally halting payments on a mortgage tied to a home that is worth significantly less than what the homeowner owes their lender.

Important Considerations

One of the reasons it is critical to seek professional guidance before engaging in a strategic default is that the consequences of this action are significant. While committing to a short sale will affect a homeowner’s credit score for a time, a strategic default will affect it significantly because this opportunity serves as an abdication of responsibility for the mortgage debt.