Dec 11, 2025
Kimberly Draxler, a single mom on disability, couldn’t believe it when her mortgage lender confirmed she was on the verge of losing her home in Hillview, Kentucky — with a distress sale just days away.
"I did not want to lose my house," Draxler, 57, told CBS News. "I wouldn't have (a) place to go."
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She had only just learned of the foreclosure when an attorney sent her a letter offering his help in preventing the bank from taking away her home of 30 years.
"They never called me and told me they were just going to rip my house right underneath me," Draxler, 57, said (1).
The lender denied this, saying that all borrowers heading towards foreclosure are notified by both mail and phone in compliance with federal rules.
Draxler explained that she fell behind on her mortgage when her adult son, who had been paying $600 a month towards household expenses, moved out in 2024.
"I just couldn't do it anymore,” Draxler said.
Draxler was able to stay in her house by filing for Chapter 13 bankruptcy, which allows debtors to hold onto their property and pay off debt over time.
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But sadly, many other Americans are losing their homes as foreclosures spike across the country.
Here’s a look at the foreclosure crisis and how to protect what is, for many, their biggest financial asset — the roof over their heads — without resorting to bankruptcy.
Which states are in most danger of foreclosures?
New foreclosures surged almost 20% year over year in October 2025, according to property data firm Attom (2).
The figure for completed foreclosures was even worse — up 32% year over year. In fact, October 2025 marked the eighth straight month of annual increases in foreclosure filings.
Rick Sharga, CEO of real estate market intelligence firm CJ Patrick Co. said more foreclosures are inevitable, citing a weakening job market, elevated mortgage rates and record consumer debt (3), which reached nearly $18.6 trillion in the third quarter of 2025, according to the Federal Reserve (4).
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Sharga expressed concern about homeowners with Federal Housing Administration (FHIA) mortgages in particular. He noted that more than one in 10 FHA mortgages are in delinquency, accounting for 52% of all seriously delinquent loans.
He added that states like Florida and Texas — where insurance premiums are soaring just as home values plummet — are experiencing a spike in foreclosures.
In 2025, Florida had the dubious distinction of being:
- No. 1 in foreclosure filings (with South Carolina and Illinois not far behind).
- A front-runner for the highest number of completed foreclosures, alongside Texas and California.
- Home to three of the top five cities with the highest number of foreclosures (Riverside, California and Cleveland, Illinois rounding out the ranks in the Top 5)
Like Draxler, many homeowners are feeling financially stretched as they shell out more for groceries, utilities and insurance and many other consumer goods. The Tax Foundation notes that since President Donald Trump instigated his trade war, retail prices are up 4.9% overall (5).
That leaves more Americans vulnerable to missing a mortgage payment if faced with an unexpected medical bill or other financial shock.
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How to protect your home
If you or someone you know is on the verge of mortgage default, there are options. The Federal Trade Commission suggests these strategies to save your home (6):
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For those facing a temporary challenge paying their mortgage, talk to your lender about::
- A repayment plan, which could work if you’re only down a few payments and won’t have problems meeting your obligations going forward. This allows you to get back in the black by adding a portion of the past-due amount onto your usual installments so you can catch up by an agreed-upon date.
- Reinstatement. This requires that you work with your lender to set a date by which you will pay the entire amount that is past-due along with any late fees or penalties.
- Forbearance, whereby your lender agrees to lower or pause your mortgage payments for a short time. You must make extra payments to catch up when the forbearance ends.
For borrowers with problems that won’t be resolved in short order, talk to your lender about:
Loan modification. This is a permanent change to at least one of the terms of your loan to lower payments to make your situation more manageable.
It’s better to be proactive and work with your lender than end up in a crisis like Draxler.
Article sources
We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.
CBS News (1); Attom (2); Challenger, Gray and Christmas (3); Federal Reserve Bank of New York (4); Tax Foundation (5); Federal Trade Commission (6)
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Libby MacDonald is a Senior Staff Reporter at Moneywise. She has extensive experience in business and consumer reporting, having covered topics including insurance, wealth management, housing and equities.
