Tight Foreclosed Home Market Takes Heightened Scrutiny

If you’ve been following foreclosure news, you already suspect that cashing in on foreclosed home opportunities in Charleston, SC must be getting more difficult. According to CoreLogic’s Insights report at the end of last month, foreclosure inventory across the nation had dropped 35% from a year earlier. Whenever the number of available bank-owned homes shrinks, the tighter market produces some predictable results: the best deals are usually snatched up quickly with multiple offers and/or higher-than-asking prices, while questionable deals—foreclosed homes priced over market or requiring too many dollars in repairs—seem to predominate.

Charleston Area Foreclosure Histories May Not Close Mortgage Options

There is encouraging news for some prospective homeowners with a Charleston foreclosure in their recent past: more common sense seems to have entered the picture.

The financial crisis that began in 2007 caused global disarray: across the U.S. (and our Charleston, SC was no exception), large numbers of responsible homeowners were clobbered by the fallout, often finding their incomes suddenly reduced or even obliterated as business cutbacks and closings reverberated through the economy.

Foreclosures Resume Slide from Record Levels

When the number of foreclosures decreases, it’s not without impact for Charleston homeowners and investors. In any given month, Charleston area foreclosures may not always mimic the national averages, but over the long run, they do tend to be pretty close. And the national trend is clear: first quarter foreclosure activity decreased to the lowest level since the second quarter of 2007 (‘activity’ includes default notices, scheduled auctions and outright bank repossessions).

A Charleston Foreclosure Is Often Less Inevitable Than You’d Think

Even though national foreclosure rates have continued to drop, the threat of becoming another Charleston foreclosure statistic is still very real for some homeowners. It’s at least somewhat reassuring to understand that most banks don’t really want a foreclosure — so for homeowners who take an early proactive approach with their lender, losing their home does not have to be inevitable.

Mortgage Restructuring

For anyone who has fallen behind on payments, Job One is to discuss the situation with your banker. If a mortgage restructuring is possible, you may have an opportunity to refinance at a lower rate with more manageable payment amounts. In some cases, it may be possible to alter other terms of your agreement — for example, you might arrange to postpone any delinquent payments to the end of the loan’s term. You have to ask.

Payment Deferral Options

If payment failure has been caused by losing a job, a medical condition one of the other more common causes, some banks will work out payment deferral options. If you have prepared documentation to back up your hardship claim, it is more likely that the lender will be able to offer an agreement to defer your payments while you get back on track.  

Short Sale

If the financial situation is such that you know you can no longer sustain regular payments, it may be best to consider a short sale — the option where the bank agrees to accept sale to a third party for a sum that falls short of the loan’s balance. It means loss of the property, but results in a better credit history than does a Charleston foreclosure.

A foreclosure in Charleston, SC becomes inevitable if the reality of a tough financial situation isn’t recognized and addressed. If you take positive steps as soon as you realize you are going to miss a payment, you put yourself in the best position to open options that are less problematic than full foreclosure. If you find you could benefit from a strictly confidential price evaluation on your home, contact me ­— sometimes a property can be worth more than you think!  

Interested in selling your Charleston area home? Visit: www.jeffcookrealestate.com

Interested in buying a Charleston area home? Visit: www.discovercharlestonareahomes.com

-Jeff Cook

Jeff Cook Real Estate

Charleston, SC