Is more government the solution or the problem? I would submit to you that government is and always has been the problem. We can all remember when the Clinton administration under Barney Frank wanted home ownership available to all Americans, even to those that could not afford one and was not credit worthy.
How was this accomplished? By pressuring the lenders to make 100% financing available and even in some cases 110%, where the homeowner walked away from the closing table with several thousand dollars in their pockets and never put one penny down in the deal. The first time I saw this, I said to myself, “How is this possible?” Oh, how I learned how it was possible.
When I was a little boy and did wrong, my grandmother would always shake her long index finger in my face and say, “You will reap what you sow”. Now the mortgage industry and the real estate industry are reaping what has been sown over the last few years.
The Obama administration tries it best to put a positive spin on the current state of our economy. I remember watching a charismatic preacher on television one time quoting verses from the Bible out of context about physical healing. He had a terrible cold and looked awfully miserable.
He said that just prior to the program being televised, he prayed to Jesus to heal him of his flu and Jesus did heal him, even though he sounded like he was still sick and his nose was still red and running.
That is a picture of our government today. It is sick (bankrupt) but refuses to believe it. All you have to do is look at our deficit and the amount of spending going on.
Just today I got an e-mail from the National Association of Realtors [NAR] giving tacit endorsement to more spending proposed by a group called the Center for American Progress. Isn’t that a nice, patriotic, sounding organization?
The fact is CAP is liberal think tank organization headed up by John Podesta, former chief of staff to President Clinton. And to think we pay our dues to NAR to support such lunacy? We don’t need more government spending. When has any nation ever spent itself into prosperity? Not in my life time and probably never yours.
Like many of you, I get e-mails and magazines from the National Association of Realtors and from my state association wanting me to write my representatives and endorse many things the Obama administration are proposing to “stimulate” the real estate industry.
Now the Obama administration has proposed to pay each lender $1,000 for each successful short sale. In addition, they want to pay the homeowner $1,500 as “moving” money. They will pay the first lender $1 for every $2 the second lender is allowed to receive.
While this may loosen up the lenders a little to accept more short sale, now the lenders want to put a stipulation in the closing instructions that a home cannot be resold for 90 days after their closing. How is this going to stimulate the economy?
I recently read that 40% of home sold were bought by investors. These investors bought the homes with the idea of reselling for a profit. By adding this stipulation to any closing instructions will only hurt the sale of these homes. I am thankful that many title companies have said they will not issue title insurance with that stipulation. They can’t monitor what happens to a home after closing. Secondly, I even wonder if it is legal.
The loan modification program established by the Obama administration just postpones the inevitable, viz., a foreclosure. Even with reduced payments, you still have to have a job to make the payments, plus many homeowners are finding out they don’t qualify for this loan modification program.
More foreclosure homes are coming on the market affecting the value of the one next door. Unemployment at a all time high while real estate is at an all time low. Which raise an important question? Where is the money coming from to pay for all this? You got, from you and me in the form of higher taxes.
Can anybody tell me what country or individual has ever spent their way into prosperity by going deeper into debt? Why does our government think otherwise?
For information on working with realtors through short sales, go to my web-site page at http://www.cansellnow.com/shortsaleinfo.html .
When is an Auction not an Auction?
Over the past six months or so, I have noticed an increase in the ads in the paper about auctioning homes. Here in the state of North Carolina, you must list your auctioneer license number in the advertisements and the property owner along with the terms of the sale. When I don’t see this in the ad, I get suspicious.
Upon further investigation of these ads, I have found two things happening. First of all, there is an investor or group of investors that claim they own the home by way of a deed BUT they do not own the debt (the mortgage), that is, they took over the property “subject to” the existing mortgage.
In most cases these are homes they are about to be foreclosed. The homeowner has throw up his or her hands and have basically given up trying to stay in the home. They deeded the property over to the investor(s) with the understanding that the investor will stop the foreclosure, buy their home or get the property sold and save their credit.
In the meantime, the investor(s) work out a “short sale” with the lender. The investor(s) then try and find an end buyer to sell the home to, at a higher price than the “short sale” offer. Part of the marketing plan is to “auction” the home to the highest bidder by way of what I call a Dutch action or round robin bidding process.
Potential buyers come and look at the home and write an offer down on a list provided by the investor(s) along with their phone number. The bidding process stays open for several hours then closes. The investor(s) call everyone on the list after the bidding process closes and tells them what the highest bid was and wants to know if they want to increase their bid. A few will, most don’t.
If the highest bid does not meet what the investor(s) need or want out of the house, there is no sale, and it basically goes back to the bank through a foreclosure. The homeowner’s credit is ruined.
The second thing I see happening is that realtors are advertising a property as an auction using a form of the silent auction method. A potential buyer makes an offer through a sealed bid. The bid process may stay open for several days. Again, as in the investor group above, if the bid does not meet expectation, there is no sale.
As a professional auctioneer, I question the legality of some of these selling methods that are being advertised as “auctions.” If you are approached about selling your home via an auction, ask that person if he or she is a licensed auctioneer,(not all states require a license) a member of the National Association of Auctioneers [NAA] and/or a member of their state auctioneer organization and about their experience in the auction business. They should also be licensed to sell real estate.
For more information on real estate auctions, go to my website at www.canSellnow.com or call me with your questions at 252-257-4822.
- What are your auction or real estate sales expectations?
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- IS IT TIME TO MOVE TO THE COUNTRY?
- The Sky Is Falling! No It Isn’t! Yes It Is!
- Why Are Lenders Making It Hard To Stimulate The Economy?
- Get the Feds Out of the Real Estate Business!
- Is Obama Hurting or Helping the Real Estate Industry?
- Should Realtors Become Auctioneers?
- When is an Auction not an Auction?