CNN – 10 cities

New York – Median price: $435,000 – Foreclosure rate: 1.08%

The New York area has the lowest foreclosure rate of any of the nation’s 10 largest metro areas. There three good reasons for that: Prices have always been high, and they have only fallen about 13%, according to the National Association of Home Builders (NAHB) housing index; many area residents rent rather than own; and a large percentage of owners are either in condominiums or co-operative apartments.
Los Angeles – Median price: $320,000 – Foreclosure rate: 3.34%

If L.A. markets didn’t exactly bubble, they were certainly in a froth, with prices so high that many people resorted to dangerous loans in order to buy. When these adjustable rate mortgages reset and the economy tanked, many people could no longer afford their payments, sending foreclosures soaring.
Chicago – Median price: $210,000 – Foreclosure rate: 3.68%

The great Midwestern metropolis was a relatively steady housing market performer all during the boom-bust cycle. Prices never got too high — they’ve fallen just 17% since late 2006 — and the bust has not wiped out much home equity, so there are few homeowners underwater. The area economy did stumble during the recession, with unemployment rising into double digits. As a result, most foreclosures here were job related rather than being tied to bad mortgages.

Dallas – Median price: $164,000 – Foreclosure rate: 1.72%

Texas cities have been among the nation’s most stable housing markets, boasting very affordable prices, continued new development and little price volatility. The economy has helped: The city’s unemployment rate is about a point below the national average, as is the state’s.

Philadelphia – Median price: $230,000 – Foreclosure rate: 1.54%

The biggest housing market handicap for Philadelphia is its old manufacturing economy, which has shed thousands of jobs over the past decade. The unemployment rate has held steady at 8.6% over the past year, and the local economy hasn’t been creating new many jobs to absorb those workers. As a result, population has grown by less than 5% since 2000, barely more than a third of the national average.

Houston – Median price: $150,000 – Foreclosure rate: 1.61%

Like Dallas, Houston has enjoyed strong population growth and steady economic progress. Its residential construction industry also benefits from a relaxed regulatory environment and cheap land for building. Prices never went through any huge run-up in Houston, either. The median Houston home now costs $150,000, more than 15% below the rest of the nation, according to the NAHB index.

Miami – Median price: $126,000 – Foreclosure rate: 7.08%

Florida’s biggest metropolis got caught up in housing fever as few other housing markets did — and it’s paying for it now. During the boom years, home prices more than doubled and thousands of new communities and condominiums were built. However, not all of those projects were finished before the bubble burst. Instead, those units came open in a real estate wasteland, with few buyers and tons of foreclosures to compete with. Having that level of supply available has sent Miami’s median home price plummeting by 60% from the peak.

Washington DC – Median price: $306,000 – Foreclosure rate: 4.42%

There’re few sweeter employment spots in the present economy than Washington, D.C., which has prospered with thanks to a growing population and the most highly educated work force in the nation. The boom did send housing markets on an unsustainable path, however. By late 2006, the median home price in the D.C. metro area had surpassed $400,000. They’ve since come back to Earth, losing about 25% of their value.

Atlanta – Median price: $143,000 – Foreclosure rate: 2.04%

Most of the foreclosures in Atlanta spring from the recession. With unemployment rising — at 10.3% in November, it was up 0.3% from last year and about a point above the national average — many out-of-work Atlantans are having trouble paying their bills. That shows up in the area’s foreclosure rate: One out of every 23 households received a filing in 2010.

Boston – Median price: $307,000 – Foreclosure rate: 1.24%

The housing market heated up in Boston before just about anyplace else. Home prices more than doubled over six years before peaking in mid-2005. The median price has dropped about 20% since then. Because Beantown is hemmed in by the harbor and by other smaller cities near its margins, land to build on is in short supply, making new homes expensive and buoying the market for existing properties.

I was never so frustrated that the HOA “board” demanded full payment.  After every party involved in this transaction made monetary concessions to work together to a reasonable close, the HOA would not budge.

What I have learned is that in certain instances like this, the HOA would be the first paid at the sale.   Even before the first mortgage.  They have nothing to lose.  They always get paid.

Point being, when HOA liens are present and they have filed to foreclose, get the sellers lender and the other parties to absorb the HOA blood money!

1. The FICO Mortgage Score
The FICO Mortgage Industry Score is designed to help mortgage lenders improve credit decisions for both current and future homeowners. Introduced by FICO and Equifax, the score delivers significantly greater assessment of mortgage repayment risk — up to 25% or more for key population segments, compared to the base BEACON score. The score aids servicers in earlier identification of borrowers at risk, mitigating the incidence and high cost of foreclosure.

2. The FICO Auto Score
FICO have also introduced another industry-specific credit score for the auto industry. According to Tom Quinn, vice-president of scoring at FICO, the new scoring model “will identify 5 to 15 percent more potential delinquencies… For the overwhelming majority of consumers, the auto industry score will be relatively close to the [generalized] FICO score,” says Quinn. “There is a percentage of the population that will be different. And that’s why lenders have opted to use the other [auto industry] score.”

TransUnion has already made this score available immediately to lenders, while Experian and Equifax are planning to follow suit later in the summer.

3. The FICO Bankcard Score
The third scoring model is specifically for the credit card industry, officially named the FICO Bankcard Industry Option. This does the same kind of things are the Mortgage and Auto industry versions, by taking your credit file and first scoring it by the “broad-based” risk scorecard system, and then by one of two industry-specific overlay scorecards — one for files with derogatory information on any type of account, one for files without. This overlay adjusts the credit bureau scores up or down. The resulting score is scaled to match the same “good versus bad” odds as the broad-based risk scores.

These three options are generally greeted with positive comments from consumer experts. The tweaking of the current “classic” FICO score can only help lenders make more informed decisions when underwriting loans.

If you are lucky enough to sell your property through a short sale in this market, what next? 

     First CONGRATS!!!  By being proactive you have solved your foreclosure problem.  Now the question, what is the bank going to do about the deficiency (difference of what is owed as to what it sold for).

1.  Your credit will be “bruised” due to the fact there are late payments on the account, but a foreclosure will not be reported which can be much worse.  If you were to go through the foreclosure process a repossession would also be reported to your credit report.  This can potentially extend the possibility to finance another home for a minimum of 2 years.

2.  If an experienced Short Sale Specialist negotiated the sale well, your credit report should read one of two ways:

     Account settled for less than full balance or

     Account satisfied

Account satisfied will imply to future creditors the account was paid in full.  This of course is the better of the two.  Account settled implies the balance was settled out and not paid in full.  Through these times mortgage lenders will realize there was a short sale or foreclosure.  It is at this point a reliable credit repair company can help minimize your time to re-establish your credit.  See my helpful links page at www.texas-short-sale.com for  a very trustworthy company.  More about credit repair companies in another post. 

3.  The biggest “SURPRISE” through this process is the possibility of a deficiency judgment.  The lender has the option to sue for the deficient amount, and if they win a court judgment it is reported to your credit report.  This is the worst thing for your credit.  It is hard to remove and almost impossible for a lender to extend credit.  SOOOO A good short sale negotiator will create a “hold harmless” contract between the lender and borrower to forgive the net deficiency.  If the property goes through the foreclosure process, there is a better chance the lender will hold the borrower liable and sue for the deficiency. 

4.   Beware some lenders may negotiate the borrower pay a promissory note for the deficient amount over an extended period of time.   Consider all options here, as each situation may differ, and make the best business decision to sell the property, move on, and re-establish your credit.  It may be a good option in the long run.