More False Hope of Free Money Once Again!
I took two weeks off. It’s time to get on a roll again so please humor me.
Sorry, but the false hope is getting agonizing. Today the talk of the town is a new plan to help save half of the expected 5 million homeowners facing foreclosure. Oh boy, college professors have Obama’s ear. The plan is basically outlined as a loan modification with some principle reduction and a “silent second trust” for appreciation recapture by the lender in the future. I don’t want to conger the displeasure of the crowd, but wasn’t Barney Frank sucking on that pop-sickle with his July 2007 save the world legislation? Here it is, just another rendition.
A ‘targeted” distressed homeowner will have their loan modified and up to 20% of the principle eliminated so they can afford to stay in their home. This means that the terms of the remaining 80% would have to genuinely be affordable so the homeowner could actually stay in their home. I am hopeful the college professors have defined how long the homeowners will be able to stay in their homes. An additional day, a week, or maybe we will get lucky and it will be a truly long term solution so we can help the people. The jury is still out on this. I just can’t wait to see the outcome.
Here is the fundamental problem. The real people in charge of lending (Jamie Diamond, CEO JPM Chase, etc) in our economy don’t like the plan because it incentivizes delinquency. Why should they agree to write down principle? That is their position and I think it is a good one. Most of the people that would require a principle write down won’t have enough income to qualify for the proposed affordable solution on the remaining 80%. How can I make such a statement? I see it every day at our company. People that have lost their jobs, their savings, and face owing the lender in many cases twice as much as the home is currently worth are in a state of panic. Do we really want to convince ourselves that a government blank check or another fancy bailout with university professors on board will save these people? In addition to saving these people, let’s also add in save the housing market and the whole world. Let’s just throw money at people and create an economy where nobody can lose. Sorry, not realistic in my book.
People in this situation need to let the property go to foreclosure and walk away or do something much more constructive and learn how they can benefit with a Short Sale. The lenders can recycle the deadbeats with a foreclosure proceeding. Everyone also has the right to investigate a real estate short sale solution to see if the rewards of providing the lender a solution have real merit. What is wrong with fixing your own problem without the government and renting for a year or two?
Wait until January. If you think your lender is a patsy you better think again. Get on board with a short sale and provide your lender a solution. In January the race car has fresh rubber and it will be full throttle to foreclosure on the part of the big lenders. Just watch. They are going to hit the accelerator and kick the machine into high gear foreclosing on homes.
The “Machine” made billions in the good times and collectively they are going to plow through the rubble (you) now with the government billions shoring up their capital. What does that mean for you? Whether you are overexposed, made a bad decision and just want out, or really have an affordability issue, this is your chance to learn about a Short Sale.
Why do I constantly preach the Real Estate Short Sale Solution? Simply because people thank me personally every week. It’s a wonderful free market solution.
Take a moment out and read the blog on loan modifications. Specifically look for my client that got the shaft last summer from his lender and shaken down for 10K only to have his payment raised from $4500 to $5500. Now that was hard love. Guess what? I told him to shut the hell up and get on board. Literally, after three weeks of griping I had to get his attention. I made it clear to him that he needed to constructively focus on a solution and get off his rants and anger. It’s a happy ending and revenge is at hand. This gentleman and his family walked away from $210,000 last Friday. The house is sold and someone else has a new home to be proud of. There are no strings attached. The residual mortgage debt was forgiven. It wasn’t easy, although it took a complete four months, but that is what we do. If you are in trouble get on board and educate yourself. That is all I ask. Avoid foreclosure with the Real Estate Short Sale Solution and The Negotiated Solution. Go for the Free Market Solution where both you and your lender win and lose false hope and government baloney. Do it for yourself and your family. Battle against the “Machine” and win! Blogging from the front line of the housing crisis.
GHunter
