Congressman Barnie Frank (Democrat from Massachusetts) is urging lenders to suspend foreclosures. Granted, he’s currently focusing this request on lenders who have received federal money from the TARP program, but if that happens, he’ll certainly pressure all major lenders to do the same thing. So the question is: Is it a wise idea?
I’m going to weigh in on this right now. Barney Frank is personally and individually at the center of the failure of Fannie Mae. It is literally true that had Barney Frank not been in office, the Fannie Mae meltdown probably would never have materialized. So it goes without saying that the man has no worthwhile sense of good economics or business. And ultimately, it’s the taxpayers who suffer, having been stuck with the $800 Billion bill for the TARP program and the $800 Billion bill for Obama’s latest stimulus program.
So the question is: Is Barney Frank suggesting a good idea, that lenders should put a moratorium on foreclosures?
Absolutely not. Such a policy will directly INCREASE the number of people who do not pay their loans, since they’ll know that they are being protected by the moratorium. Even those who are fighting valiantly to keep their loans current or at least out of foreclosure will find that there is no motivation to continue doing so.
There are plenty more reasons to oppose such a socialist policy, but I’ll leave some of those things to be pointed out by you, my esteemed reader.
Agree? Disagree? Either way – tell us what you think in the comments area below. And thank you for reading http://realestate.BryanEllis.com!
(Note – the only good news about having more foreclosures is that there will be more buying opportunities, so be sure to register for our Bulk REO Training this week [it's free]. You’ll learn about a way to get a proof of funds for $2 million+ backed by a New York hedge fund, and you’ll learn some utterly ingenious ways to use that proof of funds, even if you’re only doing regular wholesaling or short sales. To register now, click here: Bulk REO Training.)
I would have to disagree with the article posted. I am typing this from my blackberry, in the airport so I apologize for any grammitical errors.
The government gets blamed for a lot of things but and I don’t always agree politically but this one I feel the need to voice my opinion.
As a mortgage consultant of more than a decade, working in a unfavorable market like the one we are in THE BEST THING THAT HAS HAPPENED TO CONSUMERS is the hault of foreclosures.
With rates being as low as they have been in years, I am finding less qualified borrwers.
Why is that?
There are a number of factors:
1. The credit criteria has tighten, and banks and mortgage companies are slow to lend.
2. There are 4 million plus Americans out of work, who find it hard to keep up with their monthly bills and its reflected on their credit report.
3. Americans that have re-entered the workforce may have taken a job making less than what they were making with the same amount of debt. They are finding it harder to even rob peter to pay pay.
4. The mortgage they have is adjusting and yet their paycheck isn’t.
So what are they to do? They hear that we are not in a recession (which we all know we are).
They are told that the market will bounce back.
Do we add insult to injury? In addition to unemployment we add homelessness?
Haulting foreclosure forces the hands of each lender to modify loans in distress.
The government didn’t hault it the lenders did, which by the way should have been done before it got so bad. Why didn’t they? Greed for lenders and anyone else that can look for ways to capitilize on someone else’s misery. Yes this is coming from a Mortgage Consultant.
Its makes others sick to the stomach at the very thought of a hault to foreclosure for the fear that other folks will stop paying the mortgage with no recourse only to make the foreclosure rate rise.
I just don’t think that will be the case.
Until consumers can qualify for a loan, its the responsibility for each lender to work with them or the government will need to step in.
Unemployed Americans are still American people.
Bryan – you are right on the money. Barnie Franks is THE CAUSE for the meltdown and yet he, and some other less intelligent life forms, are in charge of fixing the problem. The government is taking away the incentive for people to do the right thing, work hard and accomplish their goals. We are becoming a nation of ‘entitled’ and I don’t have to personally do anything in order to get my share. This is the beginning of the end of the American Work ethic as we know it.
All I can say is get ready for the second term of Carter,i f they have their way we will all be sharing the “peanuts” that they leave for us.That’s what happens when a man gets elected only because of his race and not on his qualifications.
I’m not happy that Obama was elected, but I also think it very inaccurate to say he was elected only because of his race. Let’s stick to the point here. — Bryan Ellis
The problem is we the people never had our say in this, if I did I would have not voted for the lenders to be bailed out. It’s not helping the people. It’s helping the BIG BOYS and their benefiting from this. I don’t see were the people losing their homes are benefiting from the government helping the lenders. I don’t see how putting a stop on these foreclosures will change what is currently going on. My feeling is this will start triggering more foreclosures, why, let’s take my house, I’m like every other person out there, My home was valued at $ 295,000.00 in 2006.. Dropped down today to $ 125,000.00 and I owe $ 168,000.00. Now I’m not as upside down as some are, but I’m starting to think like the rest of the people, that is, why should I pay on a home that I owe more on than what it’s worth. Heck, if I let my house go into Foreclosure and do as short sale I could get my home back for $ 75,000.00 and end up having a lower monthly payment as well being accessed less on my property taxes.
Why should I continue to pay $ 1,650.00 per month? I’m sure there are many people thinking this same thing. Stopping the Foreclosure is not going to help. What the lenders need to do is be realistic with today’s market. The BPO’s being done on these homes when doing short sales are shooting most short sales offers in the foot. They’re not doing any justice with submitting higher BPO’s. Also, the lender often sets the guidelines for the BPO’s so to me it’s in the favor of the lender. After all there paying the BPO agent, so isn’t the agent who’s starving in today’s market have a tendency to go along with the lender? The problem is NO ONE wants to stand up and speak out about what’s really going on. The problem is the government is not truly investigating these lenders and penelizing them as they should be doing.
If these lenders under government regulations were suppose to set 2x or whatever the amount regulated aside for each non performing asset then why wasn’t that done. Why didn’t the government step in and take a more aggressive action against these lenders instead of saying “Heck Mr.Lender you screwed up, that’s OK… your UNCLE SAM will bail you out…. It’s ok Mr. Lender to screw the American people out their homes, it’s the American way, and your uncle is here to help you, not them”
What kind of message is being sent to the Americans when these lenders are being bailed out? I think this whole thing has not been thought out properly and as far as I’m concern maybe we all should let our homes go into foreclosure and send a message that we had enough of this crap…
We get dumped on while we are paying to rebuild other countries we go in and blow up. Just doesn’t make any sense to me at all and yet we have to be accountable for what we do, but they the government doesn’t have to be accountable for what they do and I don’t see the lenders being accountable for their actions.
Maybe it’s time WE the PEOPLE need to send a CLEAR Message to our government we had ENOUGH….
Back in November the State of NC passes a state law that say in essence if a lender is going to file a foreclosure in the state they must due the following:
1) Send a notice to the State Commissioner of Banks;
2) Send a notice to the property owner;
3) The State requires a 45 day waiting period to allow a
workout if possibe;
4) The State will also notify the county HUD Counseling
agency to get to the homeowner and explore the possibility
of a workout.
5) The Hud Counseling agency and the homeowner can
apply for a 30 day extension once the workout is in process.
With the above done it also allows the homeowner to place
the property “FOR SALE” or a short sale.
HUD is spending many dollars promoting this nationally but
as of today the Federal Government is now getting in the act.
The lenders do not have enough personel in their Loss Mitigation
departments and are using $12.00 per hour high school graduates
with no experience in HOME OWNERSHIP and are just pushing
papers. The bureaucracy is terrible as it takes over 90 days to
get approvals from lenders.
First I agree that there shouldn’t be a moratorium on foreclosures. However I will say that everyone loses in a foreclosure proceeding especially the bank. I recommend that (because of these unusual economic times) we add another step to the process. There needs to be a 30 to 60 day period initiated to “Force” the bank and the borrower to negotiate an alternative plan to foreclosure. (1) allow the homeowner to stay in the house by cutting his interest rate in half during the six months, (2) permanently refinance the loan, (3) negotiate a short sale price and put the house on the market jointly for up to 120 days, or (4) allow the customer to sign over the house by quick title to the Bank for the balance of the loan or 80% of the market value based on a current Broker’s Opinion/Appraisal, whichever is less. The cost of foreclosure is very costly to the bank because the process puts both parties at odds with each other and the process takes so long that the value of the house immediately drops 30 to 40% after the bank gets the property, especially in this economic environment. We don’t nor can we afford to have 9 – 10% (the percentage of homes that are currently delinquent or in foreclosure today) of the total houses in the country on the market at the same time. This alone would worsen and prolong the recession/depression and bring the housing market to its knees. We need to make every effort to MAKE both parties work together to solve this problem. I agree that Bankruptcy Courts should have the ability to restructure a loan if it deems that it is in the best interest of the creditors and debtor. I will also tell you that pumping more money into the banks isn’t the answer either. If anything offer them tax credits (versus deductions) for finding alternative ways to foreclosure and dumping mass quantities of homes on the market at the same time.
I disagree. This Nation, in the last year, has seen, as reported on many… that’s MANY major News sources an unprecedented 3 Million Foreclosures within the last year. These are the sub primes. Currently, as reported by the same above mentioned News Agencies ther are another 6 Million foreclosures ON THE BOOKS! That means we have only gotten through 1/3 of this foreclosure crisis, and we’re still only talking about the sub primes. Many, many of the Alt-A’s and A’s are receiving part or in some cases all of their monthly monies from rents or homeowner financed properties. As the other 2/3 of the current foreclosures work their way through the mill, the Alt-A’s and A’s are going to feel the heat of lost income. A lot of that income came from people who had bought with good credit. Now they have NO Credit. That’s a total of 9 Million people (usually there are 2 to each home so it’s really 18 Million) who can now not qualify for a mortgage at all. One would think that rents would go up. But the Banks, and their current practice of not dealing with their REO’s, instead of getting rid of them, should start to get the hint and just a few months and the market will be awash with REALLY CHEAP housing. Problem with that is that Landlording has grown over the last 20 years and it is now mostly viewed as a profession that isn’t worth the time and effort and risk to be in, so only the huge and the big will enter it with any seriousness and they want good credit ratings to rent from. Hello REMIC’s? After the bath that Wall St. has given out, who’s gonna invest? It certainly wouldn’t be me. Not in a REMIC.
I see it like this. The Democrats (Clinton, and I like Bill) opened the gate trying to let those less “endowed” by society become home owners. Wall St., ever searching for ways to engorge themselves caught on that there was Fast Money in giving out these new loans but they wanted “security” that didn’t really exist…. ssooooo… they bundled these loans, ILLEGALLY seperating the risk from the return, and created actual entity’s to sell the “return” bundles too, then ILLEGALLY entered into the Insurance (to qualify to the ratings agencies who they paid for their ratings) business by guaranteeing the returns on these loans to their investors, who, greedily lined up for higher returns than even the underlying loans were producing, knowing if they got burnt they were already off the hook with their cash.
You think it’s bad now. YO wait till the rest of the Public finds out that, by some or the really credentialed people’s in this Country’s opionions’
here’s one http://finance.yahoo.com/tech-ticker/article/133224/Former-Regulator-Clear-Fraud-in-Financial-Crisis—-Why-Isn%27t-Anyone-in-Jail?tickers=BAC,WM,CFC,XLF,JPM#comments
make really sure you check out HIS Credentials and listen about 3/4 of the way through where he states that 1/2 of the mortgages written in this Country aren’t worth the paper they’re written on)
that most of the sub prime’s already foreclosed on were not owned at the time of foreclosure by the foreclosing company. This is massive and this is Epic. Without Legal Sytanding to initiate a foreclosure, these companies have opened the way for all foreclosures to be re-opened through a voidjudgment pleading (see http://www.voidjudgment.com). 3 million back into court…. 3 million wanting their homes back. 6 million more on the books. Penalties, massive penalties, against not only the Mortgage companies and their servicers, but also against any Atty, who has the Legal DUTY to make sure this stuff isn’t brought before a Court unless it’s right, who co-operated in this massive fraud (see MSFraud.org) Cases have already been won. Goto MSFraud.org, click on “Law Library” then on “Legal Lounge”. There you will find hundreds of cases, already decided AGAINST the mortgage Companies, by the highest Courts.
I think it was in Maryland where, after losing her home of $500,000 a woman was awarded… throw away the mortgage, another $250,000 in damages and another $1 Million in penalties against Wells Fargo Bank.
While you’re at MSFraud.org, check out the Congresswoman from Ohio telling people to stay and squat in their homes. RIGHT ON CONGRESSWOMAN!!!
American Greed, in it’s own massive stupidity, has thrown away the foundation of it’s financial system. This is Wall Street, Real Estate Mortgage Bankers, Brokers and all of their unskilled, unstudied, incompetent agents and assigns working together, overly intoxicated on their own success, creating money out of thin air by burning up the foundation of wealth. The American dream of homeownership. Congratulations, looks like you’re finally gonna get what you deserve. I wonder how you’re gonna like actually doing manual labor, like most of the rest of the citizenry?
And please, quit whining! I made a deal with a bank on refinancing future projects back in 92. I did my part, they didn’t do their and I lost 15 rentals, my family and everything else and THEN, after the Bank ate $500,000 in my equity they managed to get DOUBLE judgements against me (don’t ask me how, but I do know that no Attorney’s can be found around here that will take any case more complicated than child support or a simple 2 page foreclosure answer…. they make so much money doing the little stuff they don’t want anything complicated… that’s what 4 of them told me) forcing me to file bankruptcy on another $100,000. THEN they reported to the Credit bureau’s…. get this… for another 12 YEARS that I still owed all those house payments and I sent over a hundred letters and had my BK Attorney involved, but all they would do is keep changing the amounts of the home loans I owed on…. 1 time actually having me owing $6 Mill on 5 houses I didn’t pay $30,000 for on any 1 of them. I have the proof, I’ve lived the life. I’m not exaggerating one bit. No attorney wants involved because of the complication (there’s no s on complication for a reason!) of the case.
I ended up moving into a shack in the woods and visiting dumpsters daily at building sites so that I could build the house I’m living in. NO legal help, screwed and burnt by a Bank, I lived with no water closer than 10 miles away for almost a year and no hot water for over a year. I went from being up $1/2 Mill, with 15 rental properties that I’d personally rehabbed, about $60 G cash and $100 G in open Credit cards to poverty. I’ve had my eye close on this Industry ever since.
I say, stay out of Real Estate. Those self aggrandizing greedy idiots have ruined it as a good and viable way to make a good living. And they will continue to try t sell us with all of their Pompous know-it-all, “I’m a Professional” attitude crap, but it’s headed down the tubes. Anyone who isn’t immersed within the Industry who just reads the paper can see it, but if you’re within, you’re just gonna lose. Bye!
PS… stock up on bug poison. When I moved into the shed I couldn’t afforf any for the first 3 months and got spider bites by the hundreds! Not fun. Stock up now!
And I’ve got just one other comment to make…. these Loan modifications we’re hearing about so much… they’re BOGUS! The only reason the Mortgage Co.’s are even vaguely interested in doing them is 1. for show and 2. because they know their paper is, in many cases, WORTHLESS and ILLEGAL!
And what many don’t know is that these Mortgage Companies have sold theses loans into “Trusts” that GUARANTEE their returns to Investors. These Mortgage Companies guaranteed these same Trusts that if a mortgage sold to the Trust went bad, that they would replace that bad Mortgage with a new one. That’s how they “insured” the Mortgages to the Trusts and that’s how the Trusts got the high Ratings from Moody’s and others…. BUT, then the TRUSTS sold off financial interests based on the income from the Mortgages and GUARANTEED that interest amount. The Mortgage Companies, by Contract, cannot alter the terms of these loans or they are in SEC Violations with the TRUSTS shareholders. Those same shareholders being little guys like CHINA, DUBAI, Israel, England, France and all the other global Country’s who’ve bought US investment paper. These guys can sue big time!
So, just so your readers know, the mortgage re-writes are strictly for the purpose of replacing illegal and worthless paper against their houses with hopefully good paper against their houses. If the mortgage companies even try to re write the loans down they are in violation of SEC Rules & Federal Contractual regulations and are gonna be sued out of existence by entities that would do just that sort of thing.
Hey Listen Martha… the addicts are trapped in the Hen house and expect me to bring them more. I hope they either pass out or pass away soon, I’m tired of hearing them moan. Hmmmm I wonder if we can burn their stuff for free heat?
Organized Crime!
John R’s article is scary, to say the least. “Stay away from real estate”? But he’s reading a re blog, and therefore has a computer. I’ve read other horror stories too. But prior re investing knowlege and experience has led to comebacks.
As for Barney Frank, you are right that he, and Chris Dodd, and numerous other democrats are at the heart of this crisis.They’ve applied political pressure to give out these loans, against standard lending practices, since the Clinton years, and have blocked ALL attempts to investigate FannieMae and FreddieMac buying up junk paper in bulk.If dems could claim credit for getting so many unqualified people loans, they can secure votes and perpetual power for generations.
I learned long ago from my father that government screws up everything it sticks its nose into. And the size and scope of today’s government and their programs are clearly beyond any of their constitutional powers. Since Herbert Hoover, and especially under FDR, America has been on the path toward socialism. And this is what happens when government gets too large and too involved in things it was never constitutionally allowed to do. A monstrosity with no accountability.
And Obama thinks FDR didn’t do enough.What a nightmare.
Although I see your point in this issue decreasing the motivation of the American public (what hope is there?), I also feel a lot of good, hard-working Americans are now in a place they don’t deserve to be in, through no fault of their own. They had good jobs, making good money and then suddenly, both husband and wife were out of a job, with kids to feed and the bills still rolling in. The average American is looking for work, however, companies really are not hiring though they post jobs. I am one of these unfortunate Americans. With my age and health, I could apply for disability, yet I choose to continue after 13 months of unemployment, (no I don’t receive unemployment benefits either) to apply for jobs that I wouldn’t have considered a year ago, all to no avail. My creditors have offered workout plans, alas, you need money to participate and without work, how do you get the funds? Frustrated doesn’t even begin to express my feelings.
Instead of bailing out the banks and car dealerships, why wasn’t the money given to the American public so they could pay their bills, hence there would be less foreclosures, it would have pumped money into the economy, and everyone would be happier. Also, if all our jobs were not shipped overseas, we could find work and make money to pay our bills. I for one, dispise the situation I am in. I enjoy working and making money. I enjoy paying my bills on time and having good credit. Unfortunately, our government has elected to take that away from our citizens and make this a communist country.
The solution is to make sure the American public has money so they can purcahse goods, pumping money back into the system. By trade, I am a real estate agent – I now make commissions of $200-500.00 instead of $2-5,000 per deal. It takes the banks 2+ months to make a decision on an offer(because they are waiting for the best one to put $$ in their pocket) most buyers get discouraged and walk away, thus realtors time was spent withou pay, which in turn causes them to get into foreclosure situations themselves.
Its a sad, sad world today compared to what our forefathers had.
I do not think that this is a good idea because if the banks put a hold on foreclosures, regardless of whether or not more people stop paying their mortgages, this will keep the banks from making a cash deal with an investor because the NED was never recorded; ergo, this will cause the banks to keep going back to the government to sell off more of their stock to the government….hmm maybe Barney Frank is not as stupid as he seems and just wants to control everything in the private sector.
I understand where some people are coming from saying that this will help more people keep their homes, but if the banks go under, then every house will be owned by the government, sort of like the feudal days in England or places like Cuba, North Korea, U.S.S.R., China…etc.
I do agree that Barnie Frank is the cause of a lot of this mess. And why he is still in office who the hell knows! But I don’t agree that placing a hold on foreclosures is a bad thing if a borrow is trying to sell their property currently through a short sale. Inventory is moving slowly and short sales need all the time that can get. By allowing borrows to short sale their homes we are at least are protecting our future home buyers that will be back in the market in another 2-3 years. If these owners go into foreclosure they will not be back into the market for another 7-10 years due to the foreclosure on their record. Those that are working with their lender to modify their loan should be protected as well. And those that are just not doing anything well I don’t see any reason in protecting them. I think this at least will protect the over supply of the inventory and the hugh number of abandoned homes. Also, I might add this will encourge the lenders to work with the short sales since they will be loosing far less than in foreclosure. And the buyers would not just think they could wait and get the property in foreclosure. A lot of the cause of this mess was greed and I think greed will be what keeps us in it for far too long.
I agree. I am facing foreclosure. I left my job for a physical reason. I could have toughed it out longer. I have not been able to replace my job. I made the choices. I took a cash out loan to fix up the place. I could have chosen no to do that. Yes my lender hit me for
7000 in discount fees that I was not aware of, I thought they were for other things. I should have known.
I am in favor of reworking loans that are/were adjustable, even those who have been laid off or a moritorium of say 1 year for those, unemployed, to pay what they can, to get back on their feet and add the interest to the back of the loan.
I am in favor of a ban on adjustable and Negative amortization loans. Yes I can even favor a rework for devalued propety IF it is across the board for every loan not just the “facing foreclosure” loans. It is entirely unfair to those who pay their loans on time to mandate for Foreclosures only.
I do not favor “favortism” toward us ‘dumb and stupid’ people. I made my bed, now I have to sleep in it.
Barney Frank is an idiot, He hurt America and he receives not even a review of his actions. America it’s time to wake up
John R. !! hahaha Preach on Bruddah! Preach on!
In short, yep, plenty more foreclosures to come…18-24 months of issues b-4 this thing even begins to turn around… time will tell if as Bryan says more people look for the loophole back door on the foreclosure moratorium. Pretty stupid concept….cut off your nose to spite your face kinda stuff. Just gas on the fire at this point. People accross the country are going to say…”I dont have to pay and I can still stay!?? Woo Hoo! ”
Anybody have any good ideas on how to make $$$ in an environment like this? Since Im not 90 years old I havent seen anything like this b4. I’ve been inventing my strategy as we go along!?? Ive got some OK ideas that are making $$ but ….
To Steven Wagner first and others that do not understand all the rules of a short sale,
While the idea of letting your house go into a short sale and buying it back for less sounds good on the surface, this will land you in prison.
What you are suggesting is mortgage fraud and you really do not want to be caught doing it.
A short sale has provisions that prohibit you or your relatives from being involved in any way; you cannot receive any kind of money from a short sale either. If you do or if you run a scam that involves a friend buying it and then you re-buy it from your friend you will both go to jail and possibly have adjoining cells. Do not think it is worth the risk.
As for the original question, from an emotional point of view it would be great to have a suspension of foreclosures, but from a realistic point of view it will be totally disastrous.
I see an even bigger lack of credit liquidity being brought on by this kind of policy. While I do not see this being pointed out by Barney or any of the other idiots that have orchestrated this mess, I do see it putting a real strain on what it left of our banks and credit market.
Think about this for a moment, if you have no idea how much or when you will be getting an income what do you spend?
If you are like most of America, you stop spending!
If you are lending money and have no real idea how much you will have on the books to lend next week you stop lending!
If you are an investor foreign or domestic, you stop investing!
How is this going to help anyone in the long term?
If anyone can show me, a business model that this concept would work in let me know!
All too often, we are told by the government to ignore business models, just go ahead, and do it. They reassure us it will be okay. I have yet to see them be right.
One thing I have to agree with Obama on is there is a lot of pain ahead of us. The sad part is so much of this was started by the Carter administration and carried on in the Democratic Congress and the final nails were put in by the Clinton administration.
I read much about this being caused by greed, when in fact most of this was caused by regulations hidden from the general public and glossed over by Barney and his buddies.
Let us be clear wanting a better house or wanting to have your own house isn’t greed, it is desire!
Do we let our desires over run our judgment at times? Sure, we do and every honest person out there will admit this, even if it is something as small as an extra piece of dessert.
I don’t see how you can put this on any one person..it took a whole lot of willing participants to get us here, including the homeowners.
I am a realtor in Florida and I am still selling houses. Since the prices are so low we are seeing lots of activity. The main problem here is that for every one that gets to the closing table there are two that fall apart because the banks take 3 to 6 months to perform their part of the short sale process. Because it takes so long it is hard to keep the buyers interested.
Barney Frank is an idiot, He hurt America and he receives not even a review of his actions. America it’s time to wake up
Looks like we already know what happened, we are still finding out who’s to blame.
We also know what will happen — more thousands and millions of foreclosures.
This really needs government intervention — to help primarily the American people who will be leaving their houses which, in turn, will cause more problems for the economy.
It’s now a matter of priority whom the government will help.
Previously, the government wrongfully helped the lenders. Unless the government people are in conspiracy with the lenders, they should stop doing this immediately.
Instead, they should immediately help the homeowners.
Suggestion: Stop foreclosure.
Find out how much banks will get if they sell property today. And find out how much homeowner can pay monthly
Looks like we already know what happened, we are still finding out who’s to blame.
We also know what will happen — more thousands and millions of foreclosures.
This really needs government intervention — to help primarily the American people who will be leaving their houses which, in turn, will cause more problems for the economy.
It’s now a matter of priority whom the government will help.
Previously, the government wrongfully helped the lenders. Unless the government people are in conspiracy with the lenders, they should stop doing this immediately.
Instead, they should immediately help the homeowners.
Suggestion: Stop foreclosure.
(1) Find out how much banks will get if they sell property today. (2) Find out how much homeowner can pay monthly
(3) Let these figures be the basis of the new loan or more properly, the new monthly payment the homeowner will pay to the lender.
(4) In the future, when economy bounces back because there is no more foreclosure, the homeowner and the lender splits the proceeds if the property is sold to investors or 3rd party buyers.
(5) The homeowner is not precluded from becoming a 3rd party buyer, in which case, he just have to pay (cash or financing) the lender’s share.
WIN-WIN-WIN —
(1) Win for the homeowner — he is not foreclosed or evicted
he can pay his monthly payment
he may be able to own the house
or he may earn from appreciation
(2) Win for the lender ——- lender need not spend more for
foreclosure, litigation, or
taking care or repair of house,
lender reduces loses from foreclosure
or litigation or repair of house
lender may be able to get its money
back
property is removed from being
a white elephant
(3) Win for the government — The government solves the problem
and will no longer be accused of
being a socialist, or in cahoots
with the lender, nor accused of
not helping the distressed
American.
GOOD FOR EVERYBODY –FOR ALL AMERICANS
GOOD LUCK!!!
I found myself in a financial bind because I invested too heavily in the real estate back in the 2000s. Having bought several homes hoping to rehab them and flip them for a profit, I found out the hard way that it is really not that easy. Especially if you had purchased the homes at the highest, which no one would have known until the bubble had burst. As you can probably guess by now, I was one of the unlucky ones and ended up losing a lot of money when the stock market crashed. The financial loss from these bad investments meant that I had to file for bankruptcy to get myself out of this rut that I was in. It was definitely difficult for me emotionally as I seemingly was on top of the world, and then in a matter of a year or so, I was left with nothing. Since the fallout of my financial demiss, I have learned that I cannot look for the shortcut to making easy money. It is a better choice to be realistic about what you can make, whether it is through your job, or any investment you are thinking of. Do not put yourself in a position where you will have so much debt that you will have to file for bankruptcy protection.