Short Sales Still on the Rise

I am amazed that there are so many daily notice of default/foreclosures in Orange County. It was a lot when 10 years ago there were 40 to 50/day. Now that has doubled and on some days, even tripled.

People's lives have been ripped apart. What to do? There aren't many options.

To avoid foreclosure, one must first face reality.

1. You either have to have money to cure the default - bring it back into good graces with the lender and also be able to start paying on your loan - all of them (most with issues have a second and even a third or fourth loan, too).

You can't just get another loan for this money. By this time, your credit is toast, and you can't get another loan. The word Foreclosure is on your credit, even if you are just pending and haven't actually had the house sold at trustee sale.

2. Loan Modifications are being advertised on TV. These are through your lender. Some will notify you, if they can get hold of you, and tell you that you can pay them $X to satisfy the shortcomings, lower your interest rate, and put the rest of the owed money either on the end of the loan or give you a year to pay them back. This means, though, that you will have to pay that payment plus your new regular payment. Can you afford that? It depends on what your monthly will end up to be, right?

3. OR the other thing is you will have to sell your home. If your house is worth less than you owe (in today's market), then you will have to have a short sale approved by the lender. It's funny how the lender really does own you. You will have to move one way or the other, if your house is sold at the trustee sale. You may as well get out of your loan gracefully, without going all the way into foreclosure sale. If your loan is a purchase money loan, one that you got when you bought the house, then you may qualify for the waiving of the deficiency on your taxes. Prez. Obama signed that into law, that you won't have to count the difference between what you owe and what they settled for as a tax gain. But you may not qualify if you had a refi loan or you didn't live in the home, aka an investor loan (NOO - Non Owner Occupied).

So in a nutshell, these are your main options. There may be others, but these are the most prevalent. You have to keep your head up. Many people are going through this same scenario. You are NOT alone!

If you need some help in making a decision, let me know.

Connie Gohata
Orange County Distinctive Homes
Specializing in Short Sales and REOs for over 27 years.
714-553-9146
714-970-7700

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714-970-7958