How Will Foreclosure Effect My Credit??
April 30, 2010 by dirkknudsen · Leave a Comment
We Are All in This One Together.
How foreclosure impacts your credit score
By Les Christie, staff writerApril 22, 2010: 4:44 PM ET
NEW YORK (CNNMoney.com) — If you’re delinquent on your mortgage, your credit score will suffer. Everyone knows that. The question is, by how much?
Until recently, those answers were hard to come by. Credit bureaus were uncommunicative about expressing, in points, just how much impact different foreclosure types of mortgage delinquencies have on scores.
Recently, Fair Isaac, which developed FICO scores, pulled back the curtain a bit, revealing some estimates of point-score declines following mortgage delinquency problems.
Here are the average hits your credit will take:
30 days late: 40 – 110 points
90 days late: 70 – 135 points
Foreclosure, short sale or deed-in-lieu: 85 – 160
Bankruptcy: 130 – 240
To come to these figures, Fair Isaac created two hypothetical consumers, one who starts out with a fair-to-middling score of 680 and the other with a very good one of 780. (FICO scores range from 300 to 850.)
The hypothetical person with the 780 FICO has 10 credit accounts versus six for the 580, plus a longer credit history, lower utilization of total credit limit and no missed payments on any account. The other consumer has two slightly damaged accounts. Neither have any accounts in collection or adverse public records.
See the chart above to see how each scenario affected each borrower.
Notice that for both borrowers a single one-time black mark results in steep drops, but it is when they fall further behind that things get really harsh, according to Craig Watts, a spokesman for Fair Isaac.
“The lending industry tends to regard an account differently when it has become 90 or more days late,” he said, “The likelihood that consumers will resume paying their overdue obligations drops off significantly after the delinquencies have reached 90 days.”
One reason credit companies were so closed-mouthed is that they often can’t definitively state how much each delinquencies will affect scores because there are too many variables.
Some borrowers will fall much more steeply than others for the same payment problem, according to Maxine Sweet, vice president for public education at Experian, one of the nation’s main credit bureaus.
“If you picture someone who has just one mortgage and one other credit account versus a mature credit user like me with 15 accounts, if they miss one payment that would impact their scores a lot more,” she said. “For me, one missed payment would just be a blip.”
The point loss also depends on the borrower’s starting point: People with very high credit scores have more to lose than low-score borrowers; the impact of a single blemish on an 800 score is more than on a 500.
Of course, it just gets worse when you face foreclosure.
Mortgage borrowers can lose their homes three basic ways: a foreclosure; a short sale, where the home is sold for less than is owed and the bank (generally) forgives the difference; or a deed-in-lieu, in which the borrower gives back the property and the bank again forgives any unpaid balance.
Sweet said credit bureaus generally slash scores equally for those three resolutions to someone losing their home. The important factor, she said, is that “it’s reported that you paid less on a settled account.”
Some borrowers may think that because they never missed a payment, they can “walk away” from their homes with relatively little impact on scores. Not true. “When a deed-in-lieu or short sale is reported as a partial payment, it’s treated as a serious delinquency,” Watts said, “just like a foreclosure.”
Even if borrowers made payments faithfully for years before short selling or doing a deed-in-lieu, their credit score will still take a hit. The total decline will run about 85 points for the 680 score borrower to as much as 160 for the 780 score.
Mortgage debt, combined with other financial problems, can send borrowers into bankruptcy, the worst thing that can happen to your credit score.
The effects are long-lasting, according to Sweet. In a Chapter 13 bankruptcy, which involves partial repayment over several years, the stain will take seven years to remove. A Chapter 7 bankruptcy, which involves liquidation, takes 10 years to get over.
It’s gonna cost you
Absorbing a big credit-score hit can make many transactions more costly. It’s not just paying more for credit card debt and auto loans, insurance can cost more as well.
The average savings for someone with a good versus mediocre credit score is about $115 a year for auto insurance and $60 for home, according to Loretta Sorters, of the Insurance Information Institute.
A low credit score can even make it harder to rent a home because landlords often use credit scores to weed out prospective renters.
Despite the problems a poor credit score can cause, Experian’s Sweet recommends that people who are in financial dead ends, like totally unaffordable mortgages, it’s better to recognize that and cut your losses quickly; don’t prolong the problem.
“You need to do what you need to do to get your finances back in order,” she said. “Don’t worry about your credit score.”
In Depth Market Stats for Oregon Show Continuation of Tough Markets
March 25, 2010 by dirkknudsen · Leave a Comment
Well things in many areas seemed to have bottomed out in the Real Estate Market in 2010. In Oregon some areas have flattened and are showings some signs of life. But overall there seems to be doubt that these markets have the ability to return to normal anytime soon.
A Recent Short Sale in Portland, Oregons North West Hills: 97229
There is going to be a shortage of buyers going forward. That much is certain. When the first time home buyers tax credit levels off things could get even more difficult. One way we can develop a better understanding of the situation is by using statistics. So here we go. Take a look at these charts tracked by real estate site Zillow. This is not pretty. Keep in mind however that Markets around Portland continue to show signs of life. State wide and in rural areas these numbers may be quite accurate. Of course please call us if you have any needs whatsoever. We take each property and each neighborhood one at a time and make a unique analysis.
Now Here is a Look at the Average List Price of a Home over the same Period of Time.
Lastly here is the Price Chart of Homes Sold over the Last 5 Years in Major Metropolitan Areas in Oregon.
Foreclosure Report For March 2010: Portland in Flux
March 23, 2010 by dirkknudsen · Leave a Comment
Portland, Oregon
For investors looking to the Pacific Northwest as a retirement destination, Oregon has it all — plus great affordability. The Market is really offering some great values right now both in short sales and foreclosures.
“We are seeing some increases in the number of actual bank foreclosures and this trend will likely continue. The fact is though Portland, Bend, Sisters, Eugene, and the Suburbs in and around Portland are all terrific places to live. The quality of live is amazing with so much to pick from in terms of lifestyle activities. This market is heating up finally and the time is ripe for investors,” said Todd Knudsen; a top Broker Short Sale and Foreclosure expert with Portland’s Re\Max Metro Gold.
Have a look at the reports findings below for more information and Call Dirk Knudsen at 503-799-8383 at Re\Max Metro Gold to start your buy or sale today.
January Foreclosures Down but Still Way Up from 2009 in Oregon
March 3, 2010 by dirkknudsen · Leave a Comment
Overall Activity Up 15 Percent From January 2009, REOs Up 31 Percent From January 2009
More Than 300,000 Properties Receive Foreclosure Filings for 11th Straight Month
IRVINE, Calif. – Feb. 11, 2010 – RealtyTrac® (www.realtytrac.com), the leading online marketplace for foreclosure properties, today released its January 2010 U.S. Foreclosure Market Report™, which shows foreclosure filings — default notices, scheduled auctions and bank repossessions — were reported on 315,716 U.S. properties during the month, a decrease of nearly 10 percent from the previous month but still 15 percent above the level reported in January 2009. The report also shows one in every 409 U.S. housing units received a foreclosure filing in January.
REO activity nationwide was down 5 percent from the previous month but still up 31 percent from January 2009; default notices were down 12 percent from the previous month but still up 4 percent from January 2009; and scheduled foreclosure auctions were down 11 percent from the previous month but still up 15 percent from January 2009.
“January foreclosure numbers are exhibiting a pattern very similar to a year ago: a double-digit percentage jump in December foreclosure activity followed by a 10 percent drop in January,” said James J. Saccacio, chief executive officer of RealtyTrac “If history repeats itself we will see a surge in the numbers over the next few months as lenders foreclose on delinquent loans where neither the existing loan modification programs or the new short sale and deed-in-lieu of foreclosure alternatives works.”
Market Report For West Portland: Bethany
February 25, 2010 by dirkknudsen · Leave a Comment
Here are the trends as they are happening year for Portland, Oregon and the Tri-County Area. Things leveled off and now indications are that we are taking another hit or dip in values as Spring begins. The availability of mortgages, the credit crunch, and the unemployment rate are all in play here in Oregon. Stay tuned and we will bring you month by month reports.
Short Sales Make Up Bigger Share of Market
February 23, 2010 by dirkknudsen · Leave a Comment
Short sales jumped to 15.9 percent of home purchase transactions last month, according to a monthly survey by Washington, D.C.-based business research firm Campbell Surveys and mortgage industry publication Inside Mortgage Finance.
That’s the highest percentage of short sales since the survey first launched in July of last year, when short sales made up 12.5 percent of transactions. Before January, the peak had been 15.1 percent in October. That figure fell to 12.6 percent in November and rose to 13.7 percent in December.
Sales of damaged real estate owned (REO) properties and move-in ready REO properties made up 13.4 percent and 13.8 percent of January home purchase transactions, respectively.
In November, those numbers were 12.3 percent and 12.6 percent, respectively, and rose to 12.4 percent and 13.1 percent in December.
“Short-sales activity took a temporary dip in November around the expected expiration of the first-time homebuyer tax credit,” said Thomas Popik, the survey’s research director, in a release.
“Few first-time homebuyers wanted to take the chance that their short-sale transaction wouldn’t be approved by the Nov. 30 deadline. But now that the tax credit has been extended, we see first-time homebuyers once again snapping up attractively priced short sales.”
Because mortgage lenders often take several months to approve a short sale, such transactions are most attractive to first-time homebuyers who don’t need to also sell a current home in a given time period, the release said.
The release also outlined possible reasons why short sales might be more palatable than REO transactions.
read the rest here:
Attribution:
Short sales at new peak in January
REO transactions still higher at 27.2%
By Inman News, Tuesday, February 23, 2010.
Inman News
Dollar Deception: How Banks Create Money
February 21, 2010 by dirkknudsen · Leave a Comment
This Article is only a Portion of the whole:
Ellen Brown, July 3rd, 2007
It has been called “the most astounding piece of sleight of hand ever invented.” The creation of money has been privatized, usurped from Congress by a private banking cartel. Most people think money is issued by fiat by the government, but that is not the case. Except for coins, which compose only about one one-thousandth of the total U.S. money supply, all of our money is now created by banks. Federal Reserve Notes (dollar bills) are issued by the Federal Reserve, a private banking corporation, and lent to the government.1 Moreover, Federal Reserve Notes and coins together compose less than 3 percent of the money supply. The other 97 percent is created by commercial banks as loans.2
Don’t believe banks create the money they lend? Neither did the jury in a landmark Minnesota case, until they heard the evidence. First National Bank of Montgomery vs. Daly (1969) was a courtroom drama worthy of a movie script.3 Defendant Jerome Daly opposed the bank’s foreclosure on his $14,000 home mortgage loan on the ground that there was no consideration for the loan. “Consideration” (“the thing exchanged”) is an essential element of a contract. Daly, an attorney representing himself, argued that the bank had put up no real money for his loan. The courtroom proceedings were recorded by Associate Justice Bill Drexler, whose chief role, he said, was to keep order in a highly charged
February 2010 Market Stats for Oregon Real Estate
February 17, 2010 by dirkknudsen · Leave a Comment
One home recently Marketed by our Team in Portland, Oregon
Come see the latest and Greatest and I might add the most Complete Stats for 2010 so far and the Year over Year Comparisons for the entire Oregon Real Estate Market. This is the RMLS Report for mid February 2010 and it is something you will want to see. Days on the Market, Average Price Per Square foot, Average Sales Price, Price Reductions, and more are featured here for every major city in Oregon. Come have a look.
Re\Max’s Owner Dave Liniger Urges Lenders
February 17, 2010 by dirkknudsen · Leave a Comment
Liniger to Lenders: ‘Release Properties’
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LINIGER
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Editor’s Note: The following is a Feb. 10 press release from RE/MAX International.
RE/MAX Urges Lenders to Release Properties
Record Foreclosure Numbers Need to Be Tackled Head On
(Denver, CO, February 10, 2010) – Dave Liniger, RE/MAX International Chairman and Co-Founder, urged government and economic leaders to push lenders to release foreclosures to help speed the housing recovery. Liniger made his comments as a featured speaker at the Five Star Government Forum in Washington D.C. The Forum brought government and industry leaders together to share ideas for building stability in the nation’s housing market.
“Most of us feel that there is a tsunami of properties out there. I can assure you in the hardest hit areas of the country, there are bidding wars going on,” said Liniger, the only speaker representing a real estate company. ”So, for those lenders who are here listening, now is the time to release properties, because you’ve got the Homebuyer Tax Credit that’s driving buyers into the market, and a limited window of opportunity to get these properties sold before the credit expires this year.”
Liniger explained that in some markets experiencing high foreclosure rates, homes in price ranges that qualify for FHA financing are attracting a lot of attention. In these areas, there are multiple offers from investors and first-time buyers, which indicates there’s a real shortage of available homes.
The Five Star Forum focused on the Home Affordable Modification Program (HAMP), and the challenges facing mortgage lenders in modifying loans under the program. It brought this group of influential leaders together to begin the hard conversation on how better to keep more Americans from losing their homes.
Over the past year, RE/MAX International has led the way on the housing recovery. Liniger and other RE/MAX representatives met with Housing and Urban Development Secretary Shaun Donovan, as well as officials with FHA, Fannie Mae, the Treasury Department, and the Homeowner Preservation Office. RE/MAX offered recommendations for streamlining the Short Sale process, some of which the Treasury Department adopted when it announced a new process last November.
In 2009, RE/MAX trained more than 10,000 agents to handle Short Sales. More RE/MAX agents have earned the Certified Distressed Property Expert (CDPE) designation than agents with any other real estate company. Surveys show that after earning a CDPE designation, agents are twice as likely to be able to keep families in their homes. And, if the best route is a Short Sale, CDPE agents are much more successful at completing the transaction.
“In our industry, we talk about distressed properties, but we’re dealing with distressed sellers, distressed human beings,” said Liniger. “They’re humiliated by their situation, and that’s why 70% of them never pick up the phone to help themselves when they’re faced with a foreclosure. That’s where Short Sales come in. They provide a better way for both the homeowner and the lender.”
While some cities and markets are experiencing a recovery, as both home sales and prices rise, others are not faring as well. Overall, the real estate industry is in a correction, according to Liniger, who sees distressed properties making up the majority of sales for the next three to five years. And, after that, another housing boom may be on the horizon.
“Once this correction is over, we have a whole new generation of homebuyers waiting to get into the market. But we have to get through this first, and the best way to do that is to take it head on.”
Short Sales Heading Hopefully For Smoother Waters
February 16, 2010 by dirkknudsen · Leave a Comment
Here is a great article about some government and Private sector folks that are finally working on some sensible goals and outcomes for speeding up and short sales. If some of these things come to pass we just might see things get a little smoother and more predictable if you will in Short Sales which can sure help our many clients here in Oregon and the Portland Area. The goal is to speed up the process and give buyers, sellers, and Real Estate Professionals a Better Chance of getting Short Sales done as a part of the process of keeping more homes from falling back into the banks hands.
This is a very informative read.
