Foreclosure filings are down!

For the third month in a row, foreclosure filings are down, down 2.8% from June 2010 and down 7% from 2009.

1/3 of residential sales last month were foreclosures and we are on track (according to Core Logic) to have 3.2 million foreclosures in 2010.  In a normal economy and market we would see 1-2% of sales in a month coming from foreclosures.

Credit Score Health in America?

Shocking news on American credit scores.

25% or 43.4 million Americans have less than a 599 credit score.  With 26 million out of work, this number of those with low credit scores could swell in the future.  With tightening of credit requirements for mortgages, credit card and insurance, the future looks tough (and more expensive) for many American's.

Strategic Defaults won't be an "easy out" anymore!

July 13, 2010
Amendment Bans Defaulting Borrowers
By Brian Collins

WASHINGTON-In passing a Federal Housing Administration reform bill, the House of Representatives approved an amendment that bans lenders from making FHA loans to borrowers who defaulted on their previous mortgage even though they had the capacity to make the payments. (Read further in this article to see what it does to borrowers ability to get Conventional loans). 
The FHA bill that was approved by a 406-4 vote directs the Department of Housing and Urban Development to issue guidance and standards that lenders will use to screen borrowers who may have been involved in a strategic default.
The main focus of the bill is to give the FHA mortgage insurance program more flexibility to adjust its premium structure and help rebuild the insurance fund's capital reserves.
The bill (H.R. 5072) also strengthens the agency's hand in getting lenders to indemnify the FHA for bad loans and to terminate lenders with excessive early default rates.
But in a surprise move, Republicans offered a motion to send the bill back to the House Financial Services Committee unless the House agreed to the strategic default amendment. The amendment was accepted and the House sent the FHA reform to the Senate.
More and more homeowners with negative equity are being drawn to the idea of strategic defaults as house prices show little sign of recovery any time soon.

First American CoreLogic reported that 4.9 million borrowers have mortgage debt that exceeds the value of their house by 25% and 14% of those borrowers are 90 days or more past due on their payments.

How does a Strategic Default effect borrowers ability to get Conventional financing?  Read on....