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Short Sale and Foreclosure Trauma...

One thing that has become very evident that is not being addressed is the emotional and mental trauma many homeowners are facing due to short sale and foreclosures. Not to be taken lightly. The look of devastation and failure has led to major depression and in some cases suicide.

We are not pyschologists but I believe we would be a doing a great service to encourage personal counseling whether it be through their churches, non profit organizations and/or possibly support groups.

To some it means absolutely nothing and they could care less. To others who have always maintained their finances and great credit becomes a major trauma and source of stress.

I have already encountered several, especially with kids who are in an absolute state of panic and despair looking for some thread of hope in their situations.

Several have lost jobs on top of losing their homes. Gas prices are not helping. Rising medical costs has caused many to cancel their medical insurance.

This whole scenario is a recipe for disaster. It is not just about losing a stickhouse.

Just another facet of foreclosure and short sale fall out that needs addressing.

Many homeowners still do not realize they have options. The more we can educate and provide services in various forms to the consumers will lighten the load for many.

This is the "season of miracles"....perhaps we can be part of the miracle in one way or fashion....

Serving Sellers and Buyers in the Greater Walnut Creek, Ca area and surrounding communities.

For more information about shortsales please visit our blog site below:

http://contracostashortsales.wordpress.com/

Posted by Terry Osburn, Broker Associate on 12/16/2007 11:19 AM

Comments (6)

short, short sales, foreclosures, default, mortgage short sale bankruptcy, past due property taxes, contra costa county, walnut creek

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6 Comments on Short Sale and Foreclosure Trauma...

DEC

2007

Terry,

It is going to be a mess in many different avenues. I totally agree with your post.

Sincerely

Tom Braatz

these type of options in my opinion are worthless!!! In today's mortgage market it dosen't matter if you short sell your house or foreclose it. One payment late is enogh for any lender to deny credit so I think that it is better for sellers just to try and make it if not let it go!!! their credit became screwed after missing the first payment.

Tom-The coming months and years is definitley going to be a challenge. It will be worse in some areas vs other areas. This is where our expertise can also be a light in the tunnel. Cannot help everyone but we sure can put out some different energy to the positive to create solutions instead of lamenting on the down side.

Michael, Do I detect some spite in your response? The biggest difference between foreclosure and short sale is the fact with a short sale the client will not have to fill out and X the box have you had a foreclosure or bankruptcy for the next 7-11 yrs. Yes, short sales has their implications but if they watch their finances they will bounce back from that sooner. A short sale is looked at as a charge off. 3-5 yrs to regroup is much better than 7-11. Especially if their circumstances changes for the better to allow them back into a home. The bottom line is that you are correct that late payments are the big no no or NO payments. So to minimize the damage would be to jump before it is to late to exercise options.

There will always be those who can make the payments they are just freaking out. Unfortunately, it is a combination of bad loans, divorce and / or medical issues for those others who do not want a foreclosure on their record.

On the other side of the coin, the lenders do not want foreclosures. It looks bad for them when they pile up in their records. Many lenders are now seeing it most likely will be in their best interest to do a short sale than to absorb not only the loss of the loan but the added expenses in a foreclosure process which adds up fast.

It is dependent on what area and location and the local market as to what will bring the lenders the best of the two scenarios.

I have ran into a lot of people who despise those have filed for bankruptcy, foreclosure and short sales.

My only comment to those people, no one is exempt from disaster. It could happen to any one of us at any time.

I am not defending those who fraudalently filled out applications and stated their income was much higher than it actually was.

I am witnessing severe hardship cases compounded by some of the creative financing due to divorce, loss of jobs and health reasons.

I do believe there is a light and there is life on the other side of foreclosure .

We totally recommend that a client seek legal counsel and check with their CPA before making a decision.

Foreclosure may very well be their best option. Each case is different.

DEC

2007

Terry - great response to your comments. There are many options out there including grants which can help get people caught up on their mortgage payments. There are too many people out there spouting doom and gloom. As professionals we have to keep our heads obove the chatter and provide our clients with the best information and options for their situations. Keep up the good work.

Thanks Nate. I agree, we need to be looking constantly for solutions instead of waddling in the mire.

Being a problem solver and finding solutions when possible is part of our job. Granted we cannot help everyone but at least we know we have tried and our clients know they have explored as many options as possible.

DEC

2007

Hi Terry, good post and a great reminder. I think Michael's message is actually a great example of what some of these folks are thinking... we missed a payment, we're screwed, why bother? You and I both know how when we look at bank owned properties there are MANY (and in some areas a MAJORITY), that never went on the market. They didn't even try to do anything about their situation. There is psychology behind their decisions and some just give up or are paralyzed not knowing what to do. That is where we, as professionals, can help. To tell someone they're already screwed by missing one payment does no one any good. In fact, they need to know they are not alone, and that there is help.

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