Thursday, April 9, 2009

Short Sales, Foreclosures, Enough Already!

Wouldn’t it be great if banks would recognize a giant service opportunity to their existing clients by working with them as parents do with their children! Don’t just throw your clients away - get down to basics and help keep the ones you have.

Many homeowners that put 10% to 20% down on their houses years ago are now being affected by the decline of home values due to many bad loans made to others with zero down payment and teaser interest rates. Now innocent homeowners are losing their homes that did nothing wrong.

A possible solution – It would be easier if the banks would step up and accept responsibility for creating this situation and stop the bleeding for everyone. Get into the trenches and reassess your portfolio collateral and bring the notes payable down to the current adjusted Fair Market Values and work with your homeowner’s loans to reset their loan to these values. The money saved in salaries, foreclosure costs, REALTOR® fees, upkeep, attorney fees, etc. will soon be realized as you help stabilize homeowners so they can stay in their homes and praise your wisdom by sending more buyers your way. What a Win Win Situation for all!

Currently many innocent people are being put out of their homes and then those same homes are sold for 40 cents on the dollar to others who could not have afforded the house at the original price and now the original homeowner is just out!

Example - #1) Recently a client said her neighbor, who purchased their home for $750,000, lost it to foreclosure and moved out. The new neighbors moved in and paid $300,000 for that same house. Now her home that she paid close to $750,000 is devalued and she is paying twice the amount for her home as her new neighbors – what is the incentive for this homeowner to now stay in the home, pay twice the amount as her neighbor, with no hope of regaining that equity?

Example #2) Client purchased home 15 years ago. Took equity from the home to purchase another principal residence and now cannot sell the 1st residence due to short sales and foreclosures in the area that have reduced the value to less than is owed on the home.

Example #3) A client that bought their home 9 years ago cannot sell it in the current market at $800,000 because the surrounding area of smaller homes is averaging $400,000 to $500,000 for short sales and foreclosures. They stand to lose this home and their credit and they did nothing wrong either. Even though their home is larger and in great shape, they cannot sell it for what is owed on it due to the comparables in the area.

Lenders, please wake up, step up and help this situation because putting people into homes that they can afford now at the expense of those that could afford their homes previously is just not right. Reduce the mortgages owed on the homes you hold and help get this economy and the pride of the American Homeowner back where it should be.

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