Columbus Metro Area Real Estate BlogRecently posted or modified blog posts by tag - Foreclosurehttps://www.camelotrealestategroup.com/blog/Copyright CamelotRealEstateGroup.com2023-03-13T12:44:39-07:00tag:camelotrealestategroup.com,2012-09-20:12189Home Equity: What is it and how does it benefit you?<img src="https://assets.site-static.com/userfiles/3777/image/what-is-equity.jpg" width="750" height="410" style="font-size: 17px;" />
As a homeowner, over time, you build equity in your property. Perhaps you have heard discussions amongst your friends and acquaintances about them utilizing the equity in their homes in various ways; possibly to remodel their home or make a major repair or to add to the down-payment on a new home. So, you ask, what is equity?
Home equity is a huge benefit of homeownership; is your stake in the property. It is the portion of your home loan that you have paid off. In practical terms, "home equity is the appraised value of your home minus any outstanding mortgage and loan balances.”
Majority of Americans Have a Large Amount of Equity
If you have owned your home for a while, it is likely that you have built up some equity. Based on data from the U.S. Census Bureau, the majority of Americans have a substantial amount of equity right now (see graph below):
<a href="https://files.mykcm.com/2023/03/10100319/americans-sitting-on-tremendous-equity-MEM.png" target="_blank" rel="noopener noreferrer"><img class="aligncenter wp-image-107831" src="https://files.mykcm.com/2023/03/10100319/americans-sitting-on-tremendous-equity-MEM.png" alt="Leverage Your Equity When You Sell Your House | MyKCM" width="600" height="450" /></a>
These record levels of home equity provide another benefit to millions of homeowners; security against another <a href="https://www.camelotrealestategroup.com/blog/foreclosure-headlines-why-you-shouldnt-fear-the-information-today/">housing market crash</a> like the one we saw in 2008. Home equity grows over time, providing financial stability while you own your home. And, when you are ready to sell, the earned equity could go a long way toward <a href="https://www.camelotrealestategroup.com/blog/closing-costs-what-you-should-know/">paying</a> for your next home.
Bottom Line
Call, text or email me to find out how much home equity you have and start planning your next move.
If you or anyone you know are facing <a href="https://www.camelotrealestategroup.com/blog/foreclosure-what-are-your-next-steps/">foreclosure</a>, let's connect so we can develop a plan to avoid you forfeiting your home and loosing the equity you have built.
2023-03-20T08:00:00-07:002023-03-13T12:44:39-07:00Denise Friend Fostertag:camelotrealestategroup.com,2012-09-20:12071Foreclosure: What Are Your Next Steps?<img src="https://assets.site-static.com/userfiles/3777/image/FORECLOSURE.jpg" width="2000" height="1429" title="Foreclsure What Does It All Mean" />
Receiving a correspondence from your mortgage lender can be a frightening situation. What are you to do? Where will you go?
This article has been written to provide you with some basic information* about the Pre-foreclosure/Foreclosure process and the steps you can take to not forfeit the equity you have built as a homeowner.
Pre-foreclosure Defined
Pre-foreclosure is the first phase of the legal process that can ultimately result in your lender repossessing your home. This action is caused by you defaulting on the payment. You can usually make your regular payment for two weeks after the due date without penalty. After day 15, the lender will begin to assess late fees.
Six weeks to two months after the first missed payment, you will receive a letter from your lender indicating that you are in breach of your mortgage contract. The letter will also include your options for catching up on your payments and it will describe what you can expect if you don't.
Notice of Default
A Notice of Default (NOD) is the legal action your lender files with the local court to notify you, the borrower, that they intend to conduct a foreclosure sale. If the default is applied, it will be recorded on your credit file and it can have a negative impact on your credit rating.
This NOD can occur within three months after your first missed payment. However, some lenders will wait 6 months or more.
Foreclosure
Once the court approves the lender’s foreclosure action a Notice of Sale is publicized. The sale is scheduled and you are required to voluntarily vacate your home, or you will be evicted.
Here is the good news!
While home price appreciation has eased over the past months, as a homeowner, you have likely gained significant equity.
What is Equity
Equity in real estate terms is defined as the difference between the market value of your home and how much you owe your lender. If the outstanding amount owed is greater than the market value of your home, the property is determined to be in a negative equity position. If the market value is greater than the amount owed, the property is determined to be in a positive equity position.
Home prices have appreciated substantially over the past few years because of an imbalanced market, meaning there have been more buyers in the market than there have been homes available to buy. The most recent Homeowner Equity Insight Report from CoreLogic finds that nationally the average homeowner's equity grew by more than $34,300 in 2022.
The map below, prepared by the Federal Housing Finance Agency (FHFA) shows on average, the rise in home prices over the past five years which has been the major driver behind equity growth. As you see, equity growth in Ohio sits right at the national average.
<img src="https://assets.site-static.com/userfiles/3777/image/Graphic-_percentage_change_in_Home_Prices.jpg" width="960" height="720" />
Why This Is So Important Right Now
If you are facing foreclosure, know that you aren't necessarily in the same <a href="https://www.camelotrealestategroup.com/blog/foreclosure-headlines-why-you-shouldnt-fear-the-information-today/">situation</a> that homeowners were facing in the mid 2000's. The majority of those homeowners who faced foreclosure then were in a negative equity position; there was no way they could have sold their homes and walked away with anything. Foreclosure then resulted in most homeowners losing their homes, being stigmatized with a huge negative impact on their credit rating and experiencing a long-term financial recovery.
If you are facing foreclosure today, and you are in a positive equity situation your home can be marketed as a traditional sale. This avoids the foreclosure blemish on your credit file and it will allow you to address any other delinquencies you may have. I have helped clients who have had foreclosure action filed against their homes sell those homes, with one client walking away with more than $100,000!
Bottom Line
If you have experienced a hardship and you find yourself in the pre-foreclosure or foreclosure process, don't wait. By not taking action now late fees and legal fees will continue to be added to the outstanding balance owed to your lender further reducing the equity you have built. Call me today to discuss your options and together we can determine how much equity you may have. Let's develop a plan to sell your home and save your equity.
*This information may vary from state to state. Please confirm the process in your area with a legal professional.
2023-03-13T07:00:00-07:002023-03-13T04:54:55-07:00Denise Friend Fostertag:camelotrealestategroup.com,2012-09-20:10826Why Today's Housing Market Isn't Like 2008<img src="https://assets.site-static.com/userfiles/3777/image/3-graphs-showing-why-todays-housing-market-isnt-like-2008-KCM.jpg" width="750" height="410" />
With all the headlines and talk in the media about the shift in the housing market, you might be thinking this is a housing bubble. It’s only natural for those thoughts to creep in that make you think it could be a repeat of what took place in 2008. But the good news is, there’s concrete data to show why this is nothing like the last time.
There’s Still a Shortage of Homes on the Market Today, Not a Surplus
For historical context, there were too many homes for sale during the housing crisis (many of which were short sales and foreclosures), and that caused prices to fall dramatically. Supply has increased since the start of this year, but there’s still a shortage of inventory available overall, primarily due to almost 15 years of underbuilding homes.
The graph below uses data from the National Association of Realtors (NAR) to show how the months’ supply of homes available now compares to the crash. Today, unsold inventory sits at just a 3.2-months’ supply (1.2 months' in Franklin County) at the current sales pace, which is significantly lower than the last time. There just isn’t enough inventory on the market for home prices to come crashing down like they did last time, even though some overheated markets may experience slight declines.
<a href="https://files.mykcm.com/2022/10/25110841/supply-of-homes-is-nothing-like-last-time-MEM.png" rel="noopener noreferrer" class="use_kcm_lightbox" target="_blank"><img loading="lazy" class="aligncenter wp-image-105320" src="https://files.mykcm.com/2022/10/25110841/supply-of-homes-is-nothing-like-last-time-MEM.png" alt="3 Graphs Showing Why Today’s Housing Market Isn’t Like 2008 | MyKCM" width="600" height="450" srcset="https://files.mykcm.com/2022/10/25110841/supply-of-homes-is-nothing-like-last-time-MEM.png 960w, https://files.mykcm.com/2022/10/25110841/supply-of-homes-is-nothing-like-last-time-MEM-600x450.png 600w, https://files.mykcm.com/2022/10/25110841/supply-of-homes-is-nothing-like-last-time-MEM-768x576.png 768w, https://files.mykcm.com/2022/10/25110841/supply-of-homes-is-nothing-like-last-time-MEM-100x75.png 100w" sizes="(max-width: 600px) 100vw, 600px" /></a>
Mortgage Standards Were Much More Relaxed Back Then
During the lead-up to the housing crisis, it was much easier to get a home loan than it is today. Running up to 2006, banks were creating artificial demand by lowering <a href="https://www.mykcm.com/2022/06/01/why-home-loans-today-arent-what-they-were-in-the-past/" title="lending standards">l</a>ending standards and making it easy for just about anyone to qualify for a home loan or refinance their current home.
Back then, lending institutions took on much greater risk in both the person and the mortgage products offered. That led to mass defaults, foreclosures, and falling prices. Today, things are different, and purchasers face much higher standards from mortgage companies.
The graph below uses Mortgage Credit Availability Index (MCAI) data from the Mortgage Bankers Association (MBA) to help tell this story. In that index, the higher the number, the easier it is to get a mortgage. The lower the number, the harder it is. In the latest report, the index fell by 5.4%, indicating standards are tightening.
<a href="https://files.mykcm.com/2022/10/25110839/lending-standards-still-under-control-MEM.png" rel="noopener noreferrer" class="use_kcm_lightbox" target="_blank"><img loading="lazy" class="aligncenter wp-image-105319" src="https://files.mykcm.com/2022/10/25110839/lending-standards-still-under-control-MEM.png" alt="3 Graphs Showing Why Today’s Housing Market Isn’t Like 2008 | MyKCM" width="600" height="450" srcset="https://files.mykcm.com/2022/10/25110839/lending-standards-still-under-control-MEM.png 960w, https://files.mykcm.com/2022/10/25110839/lending-standards-still-under-control-MEM-600x450.png 600w, https://files.mykcm.com/2022/10/25110839/lending-standards-still-under-control-MEM-768x576.png 768w, https://files.mykcm.com/2022/10/25110839/lending-standards-still-under-control-MEM-100x75.png 100w" sizes="(max-width: 600px) 100vw, 600px" /></a>
This graph also shows just how different things are today compared to the spike in credit availability leading up to the crash. Tighter lending standards over the past 14 years have helped prevent a scenario that would lead to a wave of foreclosures like the last time.
The Foreclosure Volume Is Nothing Like It Was During the Crash
Another difference is the number of homeowners that were facing foreclosure after the housing bubble burst. Foreclosure activity has been lower since the crash, largely because buyers today are more qualified and less likely to default on their loans. The graph below uses data from ATTOM Data Solutions to help paint the picture of how different things are this time:
<a href="https://files.mykcm.com/2022/10/25110845/foreclosure-starts-then-and-now-MEM.png" rel="noopener noreferrer" class="use_kcm_lightbox" target="_blank"><img loading="lazy" class="aligncenter wp-image-105322" src="https://files.mykcm.com/2022/10/25110845/foreclosure-starts-then-and-now-MEM.png" alt="3 Graphs Showing Why Today’s Housing Market Isn’t Like 2008 | MyKCM" width="600" height="450" srcset="https://files.mykcm.com/2022/10/25110845/foreclosure-starts-then-and-now-MEM.png 960w, https://files.mykcm.com/2022/10/25110845/foreclosure-starts-then-and-now-MEM-600x450.png 600w, https://files.mykcm.com/2022/10/25110845/foreclosure-starts-then-and-now-MEM-768x576.png 768w, https://files.mykcm.com/2022/10/25110845/foreclosure-starts-then-and-now-MEM-100x75.png 100w" sizes="(max-width: 600px) 100vw, 600px" /></a>
Not to mention, homeowners today have options they just didn’t have in the housing crisis when so many people owed more on their mortgages than their homes were worth. Today, many homeowners are equity rich. That equity comes, in large part, from the way home prices have appreciated over time. According to CoreLogic:
“The total average equity per borrower has now reached almost $300,000, the highest in the data series.”
Rick Sharga, Executive VP of Market Intelligence at ATTOM Data, explains the impact this has:
“Very few of the properties entering the foreclosure process have reverted to the lender at the end of the foreclosure. . . . We believe that this may be an indication that borrowers are leveraging their equity and selling their homes rather than risking the loss of their equity in a foreclosure auction.”
This goes to show homeowners are in a completely different position this time. For those facing challenges today, many have the option to use their equity to sell their house and avoid the foreclosure process.
Bottom Line
If you’re concerned we’re making the same mistakes that led to the housing crash, the graphs above should help alleviate your fears. Concrete data and expert insights clearly show why this is nothing like the last time. If you or someone you know has received a notification of foreclosure, let's connect today to discuss the steps you need to take to prevent losing your home. Time is not on your side.2022-11-09T10:18:00-07:002022-11-11T11:39:17-07:00Denise Friend Foster