I found this fascinating quote today:
COULD THE WORST FINALLY BE COMING TO AN END?Well if you read my part 1 and 2 of this continuing saga, then you should know that this year will be a make or break year for the Real Estate market. According to a recent report released by First American Core Logic, more than 11.3 million homeowners-nearly one-fourth of all Americans with a mortgage-owe more on their loan than their home is now worth. The number of underwater mortgages increased by about 626,ooo from the third quarter, they said. Another 2.3 million mortgages had less that 5% equity in their home, which could be wiped out if home prices fall further. They went on to say that, more than 10% of people with mortgages owe 25% more than their home is worth. NEVER FEAR-A NEW SOLUTION IS HERE!Taking effect April 5th, is a new program from the Treasury Department, designed to expedite short sales. In layman terms it gives the under water home owner/borrower two choices. Agree to a deed-in-lieu of foreclosure, also know as “Cash for Keys” or short sale, where home is sold for less than the outstanding debt.The program comes after more than two years of loan modifications and foreclosure moratoriums that have produced mix results, with many homeowners ineligible or defaulting again. Under this new plan, the program calls for lenders to use standardized paperwork and to establish an acceptable sale price before the home is put on the market. Sellers will be allowed 120 days to market the home and possibly as long as one year. During that time, the lender cannot foreclose. At closing, the government will give sellers up to $1500. to cover relocation expenses.According to the Treasury rules, a participating loan servicer must offer the short sale program to a borrower who does not qualify for, or did not succeed at, a loan modification under the administration’s home affordable mortgage program. WILL IT REALLY WORK OR JUST PROLONG THE INEVITABLE?Quite frankly, being the optimist that I am, I always try to look at the positive side of things. This program, however, is no different than all the rest. It’s simply another band aid fix, that may work for a few, providing the lenders, Banks, Investors holding the mortgage notes will agree to take a huge loss in the process. Sooner or later, I suspect that they will have no choice but to bite the bullet, so to speak, if they ever want to see a somewhat normal real estate market any time soon. In the meantime, in order for this program to work. Banks have to be convinced the the sales price is market value and that a reduced payoff amount is better than foreclosure. Essentially, your asking the Investor holding the mortgage note to get wiped out. Considering the fact that another 5-7 million properties are potentially eligible for foreclosure, but have not yet been repossessed and put up for sale just may be the compelling evidence one needs to finally accept The Real Reality of today’s Real Estate Market. Some economists project it could take nearly three years or more before all these homes are put on the market and purchased by new owners. I’ll be watching closely on behalf of my Buyer Clients as to whether this new program ever gets off the ground. If it does, it will open up a tremendous buying opportunity for many Home Buyers who are financially qualified and ready to make a decision. If you fall into that category and want Exclusive Buyer Representation when purchasing your next home, please call or email me for a Free confidential one on one consultation. Lets share a few ideas and put together a plan that works for you. I look forward to hearing from you soon. “HIRE ONE FOR YOUR SIDE” mathewsrealtygroup.wordpress.com, Mathews Realty Associates, Mar 2010
You should read the whole article.