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The Sacramento Beepublished an article September 26, 2011 with the following statistics compiled by RealtyTrac and Foreclosure-Response.org. They placed our region’s shadow inventory at 53,256 homes in the four surrounding areas of Sacramento, Yolo, Placerand El Dorado counties.
They included in this number three categories of distressed properties:
- 12,285 houses already owned by banks but not sold
- 19,367 units whose owners have received an initial foreclosure notice, or notice of default, but have not been foreclosed on
- 21,604 homeowners who are 90 days or more delinquent on their payments but have not received a notice of default
Lenderare starting to pick up the pace on repossessions once again. The figures provided by RealtyTrac show foreclosures in the area soared 76% from July to August, the highest number in 11 months.
Based on this “shadow inventory” it would take a year and a half to sell these distressed homes.
To read the complete article by Rick Daysog of the Sacramento Bee click here
Effective January 1, 2011, California first trust deed mortgage holders who consent to a short sale of residential property (up to 4 units) are prohibited from seeking a deficiency judgment for the difference between the mortgage balance and proceeds realized through the sale.
Senate Bill931 was passed by legistature in August and approved by the Governor on 9/30/10 to help strapped homeowners.
See the complete article at Realty Times
Fair Isaac released a report that says credit scores are affected about the same, whether a seller does a short sale or foreclosure. Fair Isaac says the average points lost on a FICO score are as follows:
- 30 days late: 40 to 110 points
- 90 days late: 70 to 135 points
- Foreclosure, short sale or deed-in-lieu: 85 to 160
- Bankruptcy: 130 to 240
Foreclosure or Deed-in-Lieu of Foreclosure
Both of these solutions affect credit the same, says David Steep of Vitek Mortgage. Sellers will take a hit of 200 to 300 points, depending on overall condition of credit. This means if a seller’s FICO score before foreclosure was 680, it could dip as low as 380.
Short Sale
Steep maintains that the effect of a short sale (providing the sellers are more than 59 days late) on a seller’s credit report is identical to that of a foreclosure. The ding on credit will show up as a pre-foreclosure in redemption status, Steep says, which will result in a loss of 200 to 300 points. This means a short sale seller with a previous FICO of 720 could see it fall from 520 to 420. If your loan stays current during a short sale, your credit will not be effected as much as not making your payments and your chances of purchasing another home sooner than two years is possible.
If you have found yourself falling behind in your mortgage and debt obligations, you aren’t alone. With the loss of jobs and declining home values and the current economy, homeowners like you are forced to consider options that were unthinkable a few years ago.
The US Department of Housing and Urban Development (HUD) has established a hotline to assist homeowners who are facing a hardship. You can contact HUD at their toll free number 1-877-483-1515 to find out what options are available to you:
1) Loan Modification
2) Short Sale
3) Foreclosure
To learn more about the tax consequences of a short sale versus a foreclosure, you can visit the IRS web site at www.irs.gov. Before executing any of these options, consult with a certified public accountant or tax attorney.
Governor Schwarzenegger has instituted a statewide, 90-day halt on foreclosure proceedings for each owner-occupied home subject to a first mortgage on which a Notice of Default has already been file.
We have received questions from many concerned sellers on what is required of them when preparing their home for prospective buyers. Due to the current economy we are seeing a large increase in the number of short sale homes available for sale. Sellers in a short sale situation are concerned about the costs to prepare their home for sale so that it doesn’t sit on the market for a long time. They also ask what needs to be done in order to fix their home up for sale for the least amount of money.
Here are a few inexpensive tips that will help you stage and sell your home more quickly:
- Wipe down all of the walls and outlets of dirty fingerprints
- Shampoo Carpeting
- Wash the Windows and Screens
- Vacuum and Dust often
- Remove all books from bookcases
- Pack up the knickknacks
- Clean off everything on kitchen counters
- Put items used daily in a small box that can be stored away when not in use
- Re-Organize Closets and Pantry
- Make Minor Repairs – Touch up any holes, scratches or damage to the walls and if you have touch up paint laying around, touch up these areas
- Keep Lawns Mown and Watered
- Trim Shrubs & Plant Colorful Flowers
- Air out House of Musty or Pet Odors
- De-Personalize – Pack up personal photos and heirlooms. Buyers can’t see past personal artifacts and you want them to see the home.
- De-Clutter – If you don’t need it, sell it, donate it or throw it away
- Get a head start on packing, you will eventually need to do it anyway
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