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.  

Guest Blog by Curt Finster

Priority Lending