The topic of conversations surrounding real estate have taken a dramatic turn as the talk shifted from a booming real estate market into conversations about short sales, foreclosures and a drop in market activity. In the last 3 weeks alone, real estate inventory has spiked almost 40% while sales in the Phoenix area have started to slow down. Granted, the inventory levels are still lower than they were at the start of 2019, it is hard to believe that we won’t see negative effects of literally shutting down the economy for weeks on end.
One question that has been coming up in conversations with solar home owners is how to deal with solar lease/loan payments when facing financial hardship. Will these solar companies work out a payment plan? A forbearance? Even forgive the debt that you owe? More importantly, will it have a negative impact on your credit?
Looking back to the financial crisis of 2008, we did not have the extra layer of solar lease/loan payments to contend with during home loan negotiations. We are treading in unchartered waters with this topic and most solar companies have yet to work out a plan. With that in mind, here are several key points to remember:
1) Solar leases typically will supersede a foreclosure. If you were to lose your home to foreclosure, there is a good chance that the new owner will still be responsible for the debt (though I must emphasize that you may still owe on it as well).
2) Solar loans are typically personal loans that can follow you even after the title of the home has transferred, unless the new owner properly assumes the loan.
3) Evidence is showing that loan and lease companies want to help out but only on a case by case basis. Worried that you cannot make a lease payment, call your servicing company immediately to work out something with them, whether it is delayed payments, payment forbearance, etc.
Even in the event of a payment forbearance where the solar company allows you to pause your payments, when will you have to pay back those missed payments? Will those missed payments hurt your credit score? Will it cause your future payments to go up? Know your options and be sure to ask questions!
If you have any direct questions, give me a call at 480-888-1234 and let’s talk options.