San Diego-based Data Quick said last Tuesday that Foreclosure Starts or properties entering the foreclosure process are at the lowest point since 2006. See the article-(Click here)
The question is, how valid is this statement? Or is this just a preliminary report, “hiding” the fact that there is still plenty of underwater property being led to the slaughter by the nation’s lenders, albeit in a timely manner so as not to disrupt the housing recovery?
It does make sense that lower unemployment & Real Estate Inventory causing rising values, then mortgage servicers and lenders bending over backwards to keep homeowners in their homes that these numbers are falling to record lows; however the flood waters being held by the dam do continue to swirl, albeit a lot of nervous homeowners wondering what will happen or do next.
With many properties thousands of dollars upside-down still and sitting in a low-interest rate payment as a result of the modification mandate required by the government, is this another collapse just waiting to happen? I can see that short sales (which are properties being sold for less than what they are owed) will continue to trickle out for quite some time in the foreseeable future and may not flood like a collapsed dam.
With that said, the state and federal laws that are in place to protect homeowners from tax liability and forgiveness of debt will not last forever, and this will throw the fright into people of what they can and cannot do. Without the laws in place, any homeowner wanting to sell as a result of finally coming to the conclusion that their value of the property will not come up enough to recoup a profit when they sell or if they are faced with a situation of having to relocate for a job (let alone other calamities that life can cause) will wonder: Who should I call? The person to deal with–whether an attorney, accountant or Real Estate agent–should know how to handle this like the back of their hand and advise you for the best outcome possible. Always get more than one opinion.
As an active Real Estate agent well-versed in California law, I have worked doing short sales between 1995 & 2008 without the current laws we have in place now. It will be extremely wise for any seller to contact first, an agent who has the contacts for counsel in tax liability and balance of loan liability to validate their knowledge, besides an agent who has worked in that timeline just mentioned.
Negotiating without laws in place will be worth more than gold, since this service will be paid for through the sale of the property, avoiding any attorney fees for negotiating settlements in the future.
These negotiations should be done by your Real Estate agent, so if they aren’t versed in this type of negotiation it would be wise to look elsewhere. Current laws to protect homeowners from tax and deficiency debt on the loan are due to possibly expire again at the first of the year. There is no guarantee that they will be extended again, since the conception among the media is that foreclosure starts are almost over, as related in the above link. I am available for any questions to provide more details.
I look forward to your comments and thanks for reading! Have a great week!