The Mortgage Man

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Archive for Foreclosure Help

Foreclosures Up….Again

Nationwide foreclosure statistics continue to rise.

According to RealtyTrac, the number of foreclosures nationwide are up 14% over last month and over 121% over the same period last year.  For the 2nd quarter of 2008 there were more than 740,000 foreclosures filed nationwide.  That equates to more than 8000 foreclosure filings per day.

While this is a frightening statistic, there is a light at the end of the tunnel.  As we continue to see the bulk of foreclosures move through the system, a bottom in the housing market is eminent.  Some estimates claim that we will see a bottom before the end of the year.  For some areas of the country, the bottom has already come and gone.

This long term outlook is good for just about everyone except potential buyers.  Those who wait for a bottom before buying may very well lose any gains through the monthly payment as mortgage rates have now risen to the highest level in almost a year.  Over the last 9 months, we have seen the best buying opportunities available in decades, and those opportunities are going to become more scarce as we get closer to a bottom.

For those sellers still experiencing pain with their home, check out PreForeclosureFSBO.com.  There you can find resources to help sell your home through a short sale and avoid foreclosure with the help of a nationwide database of investors, and help finding a local professional to get the job done.

Foreclosure Filings Continue To Soar

Foreclosure filings for last month were up 48% over the same period last year.

According to a recent article on MSNBC, 261,255 homes received some sort of foreclosure filing in the month of May.  This is an increase of 48% over May 2007, and a 7% increase from April.  Additionally, a report by Credit Suisse has predicted that as many as 6.5 million mortgages will fall into foreclosure over the next five years totaling 8% of the entire housing market.

Estimates are that between 50 and 60% of home owners in foreclosure will lose their homes.  The rest will be able to either sell or refinance.  Many of those sales will end up being “Short Sales”, meaning that they will sell for less than what is owed on the property in order to avoid foreclosure.

What Is A Short Sale?

A short sale allows you to avoid foreclosure by selling your home for less than you owe.

Short Sale to avoid forelcosure

A short sale is a term that describes the sale of your property when the mortgage holder agrees to accept a payoff that is less than the outstanding balance as payment in full. In a short sale, the lender agrees that in an effort to avoid foreclosure, they feel that accepting the lower payoff is a better financial decision than foreclosing on the home and selling it at auction.

Why would a lender agree to a short sale?

On average, a foreclosure costs the mortgage company $25,000 to $50,000. In addition to the legal and carrying costs associated with the lender holding a home in foreclosure, there is the liability of owning a vacant and abandoned home. If curious kids jump the fence, and one drowns in the pool, the liability falls on the owner (who in a foreclosure is the lender). But, first and foremost, lenders are not in the real estate business, they are in the money lending business. Any activity that takes away from that core business model costs time and money. If there is an offer on the house that is less than the current balance owed, it is very likely that the offer will at least be considered if it can be justified that accepting the offer is less costly than actually foreclosing on the home.

For more information on short sales and how you can avoid foreclosure through this process, visit PreForeclosureFSBO.com .