California has been on the leading edge for many of America’s cultural and societal trends, but there’s a trend brewing out there that you might want to do all you can to avoid.
The state and about half a dozen of its neighbors are seeing a major uptick in foreclosure activity by lenders, and I’m afraid it is a harbinger of things to come here in North Texas before too long. My advice: If you’re under water and in any danger of foreclosure, and you’ve been biding your time because your lender hasn’t been bothering you too much, quit biding and start considering a short sale.
The latest news from out west is that “foreclosure starts” surged during August in California, Arizona, Nevada, Oregon, and Washington. It’s worth noting that California, Arizona, and Nevada are three states that were the hardest hit by the bursting housing bubble. More people are in danger there of foreclosure than most anywhere else in the country, so it’s logical that a wave of foreclosures would start there.
Bank of America and its affiliates, just to take one example, initiated 116 percent more foreclosures in that region in August than they did in July. That’s not the only region affected, either. There’s a surge in foreclosures in Florida, as well, which of course is one of the other hardest-hit states.
We’ve written before about how these foreclosures were coming, but we don’t take any pleasure in being proven right. And unfortunately, it won’t be too long before we’re going to see this same thing locally.
Texas’ housing market may not have been one of the worst hit, but that doesn’t mean we’re in good shape either. A recent listing put Texas in the top 10 when it came to the percentage of homeowners delinquent in their mortgages. So we may have a few months before we see the wave of foreclosures wash over us, but we’re clearly on borrowed time.
If you know a tsunami is coming, you move to higher ground. For the foreclosure tsunami, that higher ground consists of taking action now to get your house on the market as a short sale. If things go well, you can get it sold before lenders start bringing the hammer down on homeowners who have fallen behind on payments due to financial distress.
A short sale can be wrapped up in less than seven weeks – our industry-leading average is 48 days –so there is still time to start the process now and beat the rush. Selling your house before there’s a glut on the market is a move you won’t regret. And believe me, taking control of your own fate this way will yield far better results than passively letting a foreclosure happen and finding yourself out on the street with a huge stain on your credit history.