Foreclosures, How do we stop the bleeding.
Okay, so you are probably as sick as I am of the continued increase of banks taking back the only thing they ever had as security for the ridiculous loans that they allowed. Yes, I am again talking about the sub prime debacle of 2004-2006. Wha? It went on that long? How did we let the blood sucking pariah’s latch onto the delusional buying public that long?
Well, I think we all know how and why, now we need to figure out if we are in a tunnel with a little light at the end or if we have caved in and everyone forgot to bring a shovel. I continually read about the $700 billion the Bush administration wants to throw at the problem. Wow, BILLION, can anyone really fathom what a billion of anything is?
Now let’s think about what is happening locally with all these homeowners who are giving up, walking away or have been told by the family Real Estate expert (not really an expert he/she just sold a house once) that they should just walk away from the bad investment….What? Isn’t Real Estate a long term investment with ups and downs? People stop listening to your idiot friends and relatives and listen to a trusted ethical Real Estate professional.
Let us look at what some of these banks and their hired loss mitigation rejects are doing. Mr. Homeowner contacts the loss mitigation department they are told they need to be at least 3 months behind on their mortgage before they can start any kind of negotiation. Mr. Homeowner stops paying the mortgage and spends the money on stupid stuff, Whoo Hoo! Mr. Homeowner is now 3 months behind and really all they want to do is work out some sort of deferment of interest owed or a reduction in payment and be able to keep the home and pay on the mortgage until this market changes again and then refinance.
Loss mitigation dude/dudette says their is nothing they can do except send them the forms required to do a Short Sale. Homeowner wasn’t really looking to do a short sale he/she is looking to save their property and continue being a homeowner. Now, Homeowner is six months behind and has their home on the market in the feeble attempt to do a short sale. An acceptable offer comes in. Remember the homeowner negotiates the sales contract and then negotiates with the loss mitigation dude/dudette for the reduction in the mortgage amount to cover the sales price and closing costs. And, oddly enough after another 4-6 months the loss mitigation dude/dudette, (more commonly known as Sh@# H*^d) denies the sales price and homeowner who now cannot make up any of the back payments because they spent all the money moving to their new rental or in with their parents is left with a vacant home not worth what the first accepted contract was for.
Look at it this way, homeowner owes 300k, home sells for 180k in the short sale, short sale is denied and home is now worth 145k, Bank forecloses and a few months later puts the home on the market for 129k and sells it for 150k. Sound smart? NO! They never had to foreclose in the first place had they just worked with the homeowner keeping them in the home and making payments on the adjusted mortgage. I’m not saying reduce the mortgage amount or forgive the debt or anything like that. I know the investors want their money back and are they getting it back under the current scenario?
How about this? If the Bush administration really wants to help with the bleeding, put a moratorium on the banks and investors and stop the foreclosures completely. We can’t make any headway digging out of this if the water is coming in faster than we can bail. Oh, I know, sniff, sniff, sniff, cry, cry, cry, Kelly you don’t understand the complexity of the situation. Really? I understand you can’t take the security instrument back that is no longer worth the mortgage amount and stay in business.
What do you say? Is there a better way than throwing $700 billion we really don’t have at the problem?
And I know we have to throw some amount to keep things rolling forward.
Tell us what it is please. I think the public is ready to listen.
Oh, and one more thing….Fire the loss mitigation department and have the REO department take over so there is only one hand, one mind, one decision where the banks are concerned. Banks are selling foreclosed properties for far less than the contract amount when the homeowner was attempting the short sale.
Quit it already!
Kelly…
Comments
One Response to “Foreclosures, How do we stop the bleeding.”
Leave a Reply
[...] Original post by Wallace & Kelly Modesto Real Estate Blog [...]