When Is My “Return To Equity” Date?

Posted on January 7th, 2011 in All Articles, Short Selling/Buying.

CHICAGO, IL. Short Sale Super Man Checking in. Phil Buoscio, Better Living Realty.

Many clients want to know: when is my “return to equity” date?  They owe say $450,000 on a property they refinanced in 2007 at the high point of the market, and now their home is worth $350,000. The $100,000 negative equity has limited their ability to sell, and/or move on. I often get asked what is my return to equity date.

Here’ is the “Super” big view on this. The situation we are in : the total number of delinquent loans is nearly 2.1 times historical averages, at 9.02 percent of outstanding home mortgage loans, while the nation’s foreclosure inventory is currently at 7.7 times historical averages.

When will appreciation return? When will your “equity” return? … Well…digging deeper into this — you have to figure out when the “excess” inventory will “burn off” and be gone for the “ordinary ” market forces to come back to balance.  In order for it to return the  backlog of “shadow Inventory” must be sold off/moved out of the way. Demand must reduce to meet the lower level of supply so to speak.

The supply is long… there is a long pipeline of 36 months minimum of backlogged “sludge” of foreclosures and/or short sales…Before the Robo-Signing Fraud By Banks the “sludge” of backlog was 38 months.

The delays in the foreclosure processes around the nation made that pipeline longer. As Attorney Generals’ jumped on the issue of lender fraud state foreclosures were delayed as moratoriums were instilled then lifted caused a further backlog of inventory.So here we are in January 2011–a new year. But it seems the pipeline is still getting longer. How much longer?

Loan Servicers don’t have a handle on the big picture…. . Evidence of this is in the Lender Processing Services (LPS) recent market data analysis. Things are still getting worse and the pipeline is still getting LONGER.

LPS says the volume of loans moving toREO continued to drop in November as foreclosure suspensions by major lenders interrupted and pushed back foreclosure sales– in November the number of loans moving to seriously delinquent status beyond 90 days far outpaced the number of foreclosure starts moving out of the 90-plus day bucket.
– as of the end of November, nearly 2.2 million loans were 90 days or more past due but not yet referred to a foreclosure attorney.

-one-third have not made a mortgage payment in at least a year.

-In November, 261,153 loans were referred to foreclosure, which represents a 0.7 percent decline from the previous month. –

-fewer loans moved to the foreclosure start line, LPS says the nation’s foreclosure inventory rose  for the fifth straight month as sales of foreclosure properties dropped again.
–  foreclosure inventory rate rose to 4.08 percent as of the end of November, with 2,157,000 loans caught in the pipeline somewhere in the foreclosure process.

– This 2,157,000 number is up from 3.92 percent, or 2,090,000 loans, the month before.

-Jumbo loans are even worse:  foreclosure inventory of jumbo prime loans is nearly seven times higher than it was in January 2008; the inventory of agency (Fannie Mae and Freddie Mac) prime loans is nearly six times higher

-the foreclosure inventory of option adjustable-rate mortgages (ARMs) is approaching five times the inventory in January 2008.

Thanks for reading this, Phil Buoscio.

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Phil is a Real Estate Agent at Better Living Realty – Buoscio Brokerage, Inc..
Phone: (312) 953-6725. myrealtorphil@gmail.com.
View My homes for sale at www.BetterLivingRealty.com.
Phil Buoscio specializes in loan modifications and short sales in Chicago Illinois. Chicago Loan Modification Help. Chicago Short Sales. Chicago Short Sale Realtor. Chicagoland Short Sale Realtor. Chicago IL Short Sales. Chicago Realtor.
Phil Buoscio, is a broker with Better Living Realty he leads the sales team “Phil Buoscio Team” and specializes in short sales in Chicago Illinois. Chicago Loan Modification Help can be referred to you. We don’t do loan modifications ourselves but we work with those who do.
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