• And now I’m going to stir the Real Estate Pot…

    Date: 2010.05.07 | Category: Real Estate | Tags: ,,,,,,

    I just read an article from Freddie Mac where they speak of the social cost of strategic foreclosures .

    Here they speak of people that still have good FICO scores purposely walking away from their homes because property values have gone down and how having vacant, foreclosed homes affects entire neighborhoods.  They also say that too many people walking away from their homes now COULD mean even tighter lending requirements in the future, making it nearly impossible for the next wave of homebuyers to qualify.

    Let me tell you how I really feel!

    First, I DO NOT think it is a good idea to walk away from your home. For some this has been their only option.  Loss of job, cut hours, sickness, etc.  That being said, I have met a multitude of people that have contacted their banks to work on loan modifications, only to be run around by what seems to be inept phone answerers who only follow scripts and have no authority what-so-ever to make these kinds of decisions.  And if they have a situation that cannot be answered by said script, they are told there is no help for them.

    I have also had multiple conversations with several people who need to take it to the next level and go through a short sale.  Once again…phones answered by people who follow a script and have no authority to make a decision, eventually some of these same people that had fallen on hard times and have tried to go through the right process are forced into foreclosure.  I’ve had conversations with these people after having gone through the process and they are devastated.  They have LOST THEIR HOME…they now have ruined credit and when they sit back and try to make sense of it all, they all ask “WHY didn’t the bank help me?  I wasn’t asking for a free ride…I was asking for help.”

    So back to Freddie Mac laying the guilt trip (and now asking for more money)…how about we look at the beginning…when lenders were making money hand over fist…loaning money to people that were OBVIOUSLY not ready or qualifed to buy a home.  Where where they when they were coming up with STATED INCOME/STATED ASSET loans?  Why do they deem it proper now when so many people and communities have been affected, to throw out the moral card?  On top of this, THEY get to profit with insider trader information…

    Do me a favor…get real!  Are you really concerned about communities and property values?  Then how about you contact these people that have been affected and work out a real solution.  Arrange for payments much like rent, that can be applied in the same way as lease with an option to buy.  Homes aren’t left vacant, property values continue to work themselves out, and then later a reassessment. Sure, I get all the financial issues involved.  I understand Wall street and how it works.  Maybe this conversation isn’t suited for those sitting on Wall Street…this may be a conversation for the regular person…working a 9-5 job, working to feed their family.

    Am I living in a fantasy world?  I don’t think so.  I see it as a win-win.  Homes are lived in and cared for.  Property values are given the opportunity to adjust, banks still get paid and the homeowner is still that…a homeowner.  It’s not a hand out…it’s real help given to real people.  How about putting THAT in your moral pipe and smoking it?  Just sayin’

    http://finance.yahoo.com/tech-ticker/congress-refuses-to-outlaw-insider-trading-for-lawmakers-478701.html?tickers=^dji,^gspc,^ixic,brk-a,brk-b,gs,xlf