Skip to main content

Foreclosure and Fate

Back in 1835, an Austrian physicist by the name of Schrodinger devised a way to explain quantum physics (and impress women) by placing a cat inside a sealed box with a vial of poisonous gas that could break at any moment and kill the unwitting feline.  The crux of this exercise was this: until one opened the box to see if Mr. Finickypants was still upright, the cat could be considered both alive and dead.  (Who says physicists don’t know how to party?)  We’ll come back to Schrodinger, a potential cat killer, in a few moments.

According to CoreLogic a California-based company that provides financial analytics this is the year that the lion’s share of people who foreclosed on a home previously will be coming back into the market to purchase a home.  These folks are being called “Boomerang Buyers”.  As you know, it takes seven years for a foreclosure to be removed from someone’s credit report, and 2010 was the year when foreclosures hit their peak.  Seven years is a long time to wait, so you can imagine a lot of people who had to go through the foreclosure process are eager to buy again.  However, even with the seven years now in the rearview mirror, many of these buyers still aren’t ready to purchase a home.  Why? 

In most instances, a foreclosure was the result of not being able to pay the mortgage.  (Yes, I realize I’m stating the obvious, but bear with me.)  In those same instances, in the months leading up to the need to undergo a foreclosure, many people had overlooked paying a bill here and there because their attention understandably so was elsewhere.  Well, those creditors didn’t just forget about those unpaid bills they were reported, and those matters now appear on a person’s credit report, and they still need to be addressed. 

More often than not, when someone comes to us after their seven-year waiting period all excited and ready to purchase a home again, we pull their credit and find these other matters that are keeping their credit scores lower than the individuals expected.  Sometimes these matters are easily addressed and discharged so their credit score takes a nice jump in a short period of time.  However, the majority of these good people have longer to wait while these issues are addressed and cleared in other words, these are things that could have been addressed DURING the waiting period so that when the seven-year mark hit, they wouldn’t have to wait even a day longer. 

Sure, one can take the view that if someone has had to wait for seven years to get the foreclosure off their credit report, waiting another few months won’t hurt but that’s a view most likely held by someone who hasn’t had to wait SEVEN YEARS.  For all those who are still waiting for their seven-year stint to run, meet with a mortgage company NOW to pull your credit report and have them help you address any outstanding issues so you don’t have to wait even a day longer than required. 

Let’s go back to Schrodinger, physicist/potential enemy to cats around the world: in his own weird way, he was trying to demonstrate that something could have two equally likely outcomes but left it up to fate to determine which outcome would result.  In the case of your foreclosure, kick Schrodinger in the kneecaps, and take control of your destiny don’t let fate determine . . . your fate. 

Comments

Popular posts from this blog

The Definition of Insanity (in Real Estate)

More than a couple of years ago, I witnessed something that makes me laugh and cringe at the same time.  Having lunch at a local restaurant, I spied a real estate agent and a loan originator having what I would characterize as a “first date”. I couldn’t help but overhear little snippets of their conversation, and as far as I could tell, things were going relatively well . . . at least until the agent asked the LO this question: “So, do you like to sit at open houses with agents?”  I immediately looked to the LO’s face awaiting the response.  I didn’t need to hear another single word coming out of the LO’s mouth because his face said everything:  you would have thought the agent had asked him if he enjoyed bobbing for apples in a pool of acid judging by the look on his face.  While his face was communicating complete revulsion, his lips said, “Yes, of course.”  And that’s when I looked over at the agent’s face to see, ...

Time for a New York-Style Housing Fix

Previously, I’ve written about a man who works in our office who lived in New York City back in the late ‘80s and early ‘90s – let me assure you that while that does seem like a very long time ago, it’s not nearly as far bac k as when the wheel was invented and humankind learned to harness the power of fire. If you’ve been to New York City recently and blissfully walked around Harlem to get chicken and waffles at Sylvia’s on Malcolm X Boulevard between 126 th and 127 th Streets or stopped in at Keybar on 13 th Street between First Avenue and Avenue A to wedge yourself into a cozy corner next to their notable fireplace, you wouldn’t get a sense that these areas were once . . . not as welcoming and glitzy as you now see them. Our office mate has told some fairly interesting stories of living in those and other areas of New York City that give a much different sense.   In the late ‘80s/early ‘90s, no matter how many great things you heard about Sylvia’s food, 127 th Str...

Change: the Only Sure Thing

Which headline is better for grabbing your attention and prompting you to read the article to which it’s attached: “Credit Reports to Exclude Certain Negative Information, But Read on to See if This Even Applies to You” or “ Credit Reports to Exclude Certain Negative Information, Boosting FICO Scores”?   Obviously, the former is less than tantalizing while the latter makes you say, “Tell me more!”   I was in the “tell me more” camp, and the folks at The Wall Street Journal sucked me into their vortex. The development, set to go into practice on July 1 st , is certainly a departure from how the Big Three (Experian, TransUnion , and Equifax) have done things in the past, but it’s not going to wave a magic wand and make bankruptcies, foreclosures, short sales, etc., go away.   It’s sort of a bittersweet development.   Let me explain: Many tax liens and civil judgments will be removed from people’s credit reports if they don’t include a complete list of a...