Foreclosures in our local market place and the Misconception of the Media
What constitutes a Foreclosure. There are a couple of components and a three step process that a homeowner goes through to get to a point where they actually lose their home to foreclosure.
Generally if a home owner is late on his or her payment, the lender gets a little concerned. Initially most lenders will call the homeowner, or write them a letter, telling them they are late and to make the payment, and that they will be jeopardizing their credit, or worst lose their home.
If that does not get their attention, the lender will officially start the foreclosure process. The three elements to the process are;
1. The 1st phase is the Notice of Default (NOD) period, which is a 90 day event (3 months) to catch up in making their payment current.
2. The 2nd phase is the Notice of Trustee Sale (NOTS). This is the most critical phase, and a serious warning, that they will lose their home to the Trust Deed Sale, if the payments are not brought current in a period of 21 days, also known as the publication period. (Notice of Trust Deed Sale). This is a period that is most stressful.
3. The 3rd phase is the Actual Sale itself, where as, someone bids what is owed on the property, plus all cost involved with the trust deed that is being foreclosed on. The Successful bidder will also assume any of the and all senior liens in front of the trust deed being foreclosed on, plus property taxes, HOA's, if applicable, federal and state taxes that have been recorded with the property, as well as any judgments that remained with the property.
When no one bids on the property, the lender, also known as, the beneficiary, instructs the Trustee to bid on the beneficiary's behalf to retain the property. At that point, the beneficiary has possession of the collateral (the real estate property, also known as an REO (Real Estate Owned Property.)
In an attempt to bring some rational thinking in the housing market, and to undo the harm that the news media is portraying that the sky is falling with foreclosures, the publisher of "The Real Estate Market Magazine", wants the public to know, that the real estate market is not as bad as the news media is painting.
Don't allow yourselves to be sucked in, like a stampeding heard of cattle, running scared. Here are a few facts that have been misinterpreted by comparing your local real estate market to other areas, such as the San Diego, or the Inland Empire. I don't understand how statistics can be twisted, but facts are facts. Our Local market is not the entire State of California or the entire United States.
The news media, Newspapers, Television, Radio, Magazines and the Internet, have one thing in common with each other. They all want and are competing for your advertising dollars. The only way for them to draw attention to their advertisers is to grab your attention long enough and hold you in suspense to stay tuned to the sensationalism of the news. Remember the News is a by product of their business. The media's real business is selling advertising, so in order to sell advertising they sometimes distort the news or twist statistics to their benefit, just so long as they grab your attention. Stay tuned for the News; .....
Out of 21 cities in Los Angeles County, from Long Beach to the City of Los Angeles, from Montebello to Whittier, Compton, Lynwood, South Gate, Huntington Park, Downey, Santa Fe Springs, Norwalk, Bellflower, Lakewood, Cerritos, Maywood, Bell, Bell Gardens, Maywood, Paramount, La Mirada, and Pico Rivera, from a period from January to October 1st, 2007, out of approx. 2 million people, there were 12,600 homes in Default (NOD Status), not all went to sale, some refinanced , some borrowed money from family and friends, and some had a modification of their loan, some actually were able to sell.
Of the number in our local market area only, 6,649 NOD's that actually went into a Notice of Trust Deed Sale, only a small fraction of the remaining, that actually lost their homes to foreclosure, approx. 2,957 REO's that went back to the Bank. That's a far cry that the sky is falling. 80% of those that used 100% financing and stated income programs are still viable and paying their mortgages and living in their homes. Many that could not purchase in our local real estate market, bought elsewhere. Choose a Real Estate professional from "The Real Estate Market Magazine" to buy your next home. Tell them you saw it here.
"The Real Estate Market Magazine" www.TREMM.
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