If you or someone you know is headed for foreclosure, you might be wondering how this will change your credit score. A recent article from CNNMoney.com breaks it down like this: 30 days late: 40 - 110 points; 90 days late: 70 - 135 points; Foreclosure, short sale or deed-in-lieu: 85 - 160; Bankruptcy: 130 - 240... However, this may not be the case for everyone. For example, I know of someone who lost their home to foreclosure about 2 years ago. This person always paid their bills on time, and had a decent credit score of around 700-730. Until they lost their job (at this time their home was also up for sale and under contract as a "short sale", but the bank would not approve it). At that point they decided to let the house go, since the mortgage was too much to keep up with, but kept paying all of the other bills on time, such as car loans and credit cards. This helped tremendously. Just a couple months after the foreclosure had finalized, this individual was able to land a well-paying new job, lease a new car, rent a home, and maintain a credit score of about 690. Unfortunately, they will not be able to obtain a new home loan for another year, but just so you know, there is still hope after foreclosure. Note: Don’t stop paying your bills because you think a foreclosure will ruin your credit.
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"Nearly two-thirds of Americans would still prefer to own a home, although the recent housing market turmoil and uncertain economy have made them a little more cautious about how and when, according to a survey released Tuesday." CNNMoney.com
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NEW YORK (CNNMoney.com) -- Despite signs that the real estate market might be lurching forward, prices are expected to fall further this year and next. The average home price in the United States will fall by about 6% by September 2011, according to a joint report between Fiserv and Moody's Economy.com. And that's after plunging more than 27% in the past three years.
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"First, the good news: Foreclosure filings dropped nearly 10% between December and January. That's a total of 315,716 notices compared to 349,519 in December, according to RealtyTrac, which issues a monthly report on foreclosure activity." CNNMoney.com
Read all of Foreclosure filings up and down... what is going on?
"According to a study from Remodeling magazine, the average return on value for an upgrade declined from 87% in 2005 to 64% in 2009. But these six new rules will help you maximize your return on your remodeling investment." CNNMoney.com
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Okay, we promised to keep you updated on President Obama's HAMP, so here's an article from CNNMONEY.com summing up the latest news. "The new policy will make it harder for troubled homeowners to start the process, but it should make it easier for them to qualify for permanent assistance under President's Obama foreclosure prevention plan."
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1st time homebuyers can now file for their $8,000 tax credit using new form 5405.
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"Most financial advisers suggest you should have a good 5% of your portfolio in real estate now."
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On Thursday Treasury Assistant Secretary for Financial Stability, Herbert Allison, at the House Financial Services hearing said “We're not satisfied yet with how this program is unfolding”. Even though foreclosure filings have fell 8% from November many home owners are still in need of help. So far only about 4% have been able to receive permanent modification assistance under Obama’s $75 billion “Home Owner’s Modification Plan”. Reasons for this include the lack of home owners making monthly payments and turning in the necessary paperwork to complete their modification plans.
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2009 reports show US Homeowners have lost nearly $500 billion in home values overall, but that’s still better than last year. The biggest losers were the Los Angeles, Chicago and New York metro areas at a collective $159.4 billion loss in home values. In contrast, Metro Boston, Providence, R.I., and Denver gained $46.4 billion in home values all together. So where will this lead the direction of home values in your area? Unfortunately, this is something which is hard to predict. There are many factors which figure into this equation such as; home equity (negative and positive), (un)employment, living wage jobs, etc.
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