Wednesday, December 19, 2007

Fear of foreclosure

If you read the headline in this morning's Seattle P-I, "More in county losing homes", you may have been left with the impression that foreclosures are a common thing in Seattle/King County. The lone statistic cited above the headline, "126.9%" increase, seems to solidify this "fact." You must read -- and read between the lines -- the entire article to get a true picture of what's happening.

For example, seven paragraphs into the story, you learn that only 1 of every 1,033 households in King County filed for foreclosure in November, as compared to a nationwide average of 1 for every 617 households! And it is not until the very last paragraph of the story -- buried inside on page A12 -- that the writer mentions that one home can account for several filings, and many filings DO NOT ultimately result in foreclosure.

Am I saying that fear of foreclosure is foolish? No. It's important to consider your financing options carefully and try to ensure that you do not get in over your head with a home loan. But the reality is that very few homeowners find themselves in a serious threat of foreclosure. In fact, it's generally easier/quicker to be evicted from an apartment/house for failing to pay the rent, than it is to be ousted from your home for failing to keep up your mortgage payments.

So once again, I urge you to resist the media's attempts to induce fear about the state of the housing market. There is really only one home and one loan that should concern you -- yours. And the way to avoid trouble is to do your research and work with professionals you trust and respect to help you find and purchase (or sell) a home.

What do you think? Should fear of foreclosure prevent you from buying a home?