You turn on the television and you glance at your local paper - one thing that we can’t seem to escape is the updates and breaking news on the current housing crisis. It has affected the entire nation, but here in California we are definitely hurting more than others. Well, I’m not one to break trends so here is my little blurb about the current mortgage crisis here in California.
According to the data and statistics collected by DQnews this month, an estimated 32 percent of homeowners in default are able to escape the foreclosure process by refinancing, selling, or bringing their payments current. One year ago, the statistic was more optimistic as 52 percent were able to avoid a foreclosure. A foreclosure is quite a shattering experience to go through, but when only 32 percent of homeowners are able to pick themselves up - those 68 percent start to feel that they are in the majority and feel a little more “normal”.
This trend in defaulting is quite a worrying factor as the stigma of a foreclosure is transforming into something that is actually “common” and maybe even “necessary”. Unfortunately, this is where the snowball really starts to grow.
What It Means for You
To feel the effects of the housing crisis, you don’t have to have missed a payment or lost a job - instead, you just have to live around those who have. You didn’t have to take a risky loan or lived beyond your means - again, you just have to live around those who have. When they go into foreclosure and can’t pick themselves up, they have effectively stripped equity from your home and the local community.
Now what?
In this market, if you are looking to sell your home - there are obviously a lot of opposing forces to overcome. It is more important than ever to make sure you have an agent who is experienced and comfortable with your target audience. The best Realtor in Los Angeles referred to you by a friend would be nice, but unnecessary, if you lived in the Bay Area. If you are simply trying to evaluate what to do with your current mortgage, speak to a loan consultant earlier than later. Time is one thing that is on your side before you are in trouble - shop early and do your research beforehand.
Source: Dqnews
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I was actually surprised to see that 32% sidestepped foreclosure with a timely sale / refinance. That seems pretty good considering what you’re up against in this market. The problem with some of the 68% though is probably that the stigma of going into foreclosure is gone, it’s okay top screw your neighbors over and walk if you don’t like your investment decisions. Maybe they need to start publishing ‘dirtbag” lists in the papers, like they do with people that don’t pay their property taxes.
With the housing crisis being covered so heavily by all the news channels, a lot of people who are considering foreclosure do feel like they are not alone. Unfortunately, you are right, that stigma of a foreclosure is not what it used to be like in the past - today it is common news. As for publishing a “dirtbag” list, I’m sure many many homeowners agree with you about that - but for now, our main priority should be to find solutions to this mess.