How Long From Default to Foreclosure?

by Ken Kappel on February 1, 2011

How Long From Default to Foreclosure?

The answer, which may surprise you – a lot – has been provided by the Wall Street Journal. See full article here.

The number is 492 days from default to foreclosure. We’ll say it again, from the last day a borrower makes a payment through and to foreclosure is 492 days. Frankly, this enough time for people to make some serious decisions, and moreover, save up a nest egg for moving on.

And, be able to afford to take a course of action using legal leverage that results in a “fair” Short Sale, or on the other hand, if the issue is being underwater, use legal leverage to obtain a loan reorg including a principal reduction, 30 year fixed at 5%.

Just like the way it used to be. Although that 5% is lower than the historic rate for a 30 year fixed rate loan. Why should you get a low rate? It’s a matter of a superior negotiating position when you have the facts obtained  from a Forensic Loan and/or a Securities Audit.

If your loan was Securitized (most were) they really can’t legally foreclose. That is coming forward in the courts, and we have several articles here on this blog, and many more coming as we document the impact that investor lawsuits are having on loan originators. Those suits seek “put backs” where the originators are forced to take back loans that were illegally Securitized.

See our recent Post:
Foreclosure Not Legal If Loans Illegally Securitized

What we’re suggesting is that you will be in a position to “put back” the loan your self, or, foreclose on the bank, rather than the usual vice verse. We’ll have more on this later. Stay tuned.

According the Journal:
”Banks can’t foreclose fast enough to keep up with all the people defaulting on their mortgage loans. That’s a problem, because it could make stiffing the bank even more attractive to struggling borrowers.”

”… banks are taking progressively longer to foreclose. The average borrower in the foreclosure process hadn’t made a payment in 492 days as of the end of October, according to LPS. That compares to 382 days a year ago and a low of 244 days in August 2007.”

”In other words, people who default on their mortgages can reasonably expect, on average, to stay in their homes rent-free more than 16 months. In some states such as New York and Florida, the number is closer to 20 months.”

Ken here. This makes our point from above, you have considerable time to consider your options.

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