California delinquencies push short sales
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The percent of California’s mortgage debt balance that was 90+ days delinquent and not yet in foreclosure under a notice of default (NOD) decreased to 2.9% in the fourth quarter (Q4) of 2012. This was down from 3.6% one year earlier. The normal 90+ day delinquency rate for mortgages not yet in foreclosure is less than 0.5%.
The 90-day delinquency rate on home mortgages is a leading indicator of the trend in short sales, NOD recordings, trustee’s (foreclosure) sales and REO resales. Home loans in California make up 12.9% of all loans in the nation, and roughly 20% of the nation’s delinquent mortgage loans are found in California. Thus, our state’s delinquency rate has a substantial bearing on both the California and national economies.
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Carrie B. Reyes
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http://www.uscourts.gov/News/NewsView/12-05-09/Bankruptcy_Filings_Down_13_Percent_for_March.aspx?CntPageID=1
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I beg to differ with the author “First Tuesday” regarding the comment that “For the homeowner, however, a shortsale is often as deleterious to the homowner’s credit score as an actual foreclosure, and does not represent an improvement in the financial well being of a delinquent homeowner.
To begin with, a short sale is much better than a foreclosure because on the credit report it shows the loan was paid satisfactorily. The homeowner, with established new credit, can buy again in 2 years or less. Plus a homeowner doing a short sale shows they took responsibility for the problem, found a solution good for everyone and closed the sale.
Plus their credit score will drop less and recover sooner for a short sale than for a foreclosure.
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Short sales are an alternative to foreclosure. However, your credit score is impacted largely by the number of derogatory lates in that mortgage your selling short. In cases, credit scores margings are close between the short sale and foreclosure. Although, short sale is the way to go to purchase again within a couple of years. Foreclosures require a 3 yr minimum with explanation. Also, data I recieved from a lender that i will keep nameless, a short sale is reported in a non-favorable way to the credit bureaus.
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Every $1.00 of short sale cost the banker 20cents and tax payers aka USA 80 cents!
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