Shmittens is a term that some of us regular doggie park go-ers coined for when an irresponsible dog owner lets them do their business, fails to pick it up and the next thing we know another pup has run through it and several people end up having to clean up the mess. It started out to be "sh*t mittens" but we shortened it down to "shmittens" to clean it up so we could use the phrase in front of the younger crowd.
Shmittens suck because we normally don't realize it until it is too late. Several people usually get "schmittened" inadvertently by the dog before the "shmittens" get cleaned up. Shmitteny prints get everywhere.
Reading Gena's post yesterday AM, reminded me of schmittens. A very rude commenter came on and blatantly accused me of being ill informed in regards to the subprime mortgage market. He claimed to be a Realtor and Lender (gotta love hybrids) in that market. I am sorry but I do know about what is going on and what needs and doesn't need to be done. I have my baby wipes out and am cleaning up past shmittens as we speak.
Our governor has attempted to do the same and we ended up with a website. YIPPEE! It has had a whole 366 visits as of right now (I believe it went live around the 1st of Nov). You have got to be kidding me!?!?!?! I am betting in the same time period this particular blog post will have the more visits. It appears that the Governor of Cali is just trying to extend a hand to the lenders to prolong the inevitable or to help a couple of homeowners get their stuff in gear and headed in the right direction. It all remains to be seen. I don't believe this is divine governmental intervention at it's finest. I believe it is just PR for something that can be done by yourself or that other lenders are doing as a public service (more shmitten cleaning.)
Quite honestly, I do believe that most homes going "back to the bank" in Nevada are speculator owned. These homes were bought by pseudo investors back in the hayday of killer appreciation. I keep saying if we take those speculators out of our market, our foreclosure rate is just normal or merely slightly above. What is absolutely going to kill us though, is the abundance of inventory that is pressuring prices downward. Only serious sellers should be selling right now!
Here are hints of fraud from our up market:
- Lots of homes from a single, newer subdivision facing foreclosure (possible RESPA violations from uses of builder's lender)
- Speculators cutting their losses and not expecting long term holds
- Over statement of income by buyers or suggestion from lenders with a wink and a nod (mortgage fraud resource link)
- Appraisals coming in high with no justification
- Just to name a few..
Hints of fraud from the down market:
- Short sales double ending by agents. They are making it impossible to show the property or turn in offers. Banks should consider making it mandatory to fax them the offers and keep the property listed as exclusive right status until THEY accept the offer.
- Husband/wife teams saying they are "getting a divorce" and want to short sale the property to one of the spouses.
- Bailout scams where the owners think they are becoming current on their mortgage when in reality they are signing over the title to a new owner and are still liable for a mortgage
- Speculators collecting rent and not paying their mortgage
- Just to name a few..
Luckily our real estate market has some fuel in it because there is a sharp demand for housing:
REOs have brought the buyers out and properties that are priced appropriately are selling fast and with multiple offers. Short Sale fraud & unwillingness from banks to hurry has created massive amounts of inventory. We are certainly balancing a tight rope to educate our buyers and sellers in regards to the market conditions. We need to restore buyer confidence because, if a buyer can qualify for a conforming mortgage product in the Las Vegas Valley, there is barely any disparity between a rental or a mortgage payment anymore.
Owner occupied residents facing foreclosure should do everything they can in their power to save their homes because it is a landlord's market. Where will they live if they can't save their homes? Landlords have the pick of the litter when it comes to finding applicants with good credit, employment and rental history. They are thumbing their noses at foreclosures, bankruptcies and even just marginal rental & employment histories and credit, because they can.
The Libertarian in me begs me to avoid talking politics but isn't it ironic? The 'Enron' Energy Crisis, 9/11, Loosening of Credit to create euphoria, A War in the Middle East and Oil Prices Skyrocketing. "We Didn't Start the Fire", revised for this decade, really? I don't think anyone could foresee the future, that we would end up with shmittens all over us when this all started in 2001 and a fast forward to 2007: Tripled electric prices, doubled gasoline and heating prices, adjusted mortgage rates & doubled home prices sucking money out of the economy.
I don't think the Governor is proposing a bailout, he is merely getting the word out that we need to renegotiate our notes at the first sign of trouble. Why is it a bad thing? It is a win-win for both the homeowner and the note holder, at this point in time.
After all, I sincerely believe that the government did create the economic frenzy we are in today and I think they should probably stay out of it to let it correct itself. We, as real estate professionals, have the power to step up to the plate and teach people how to fix the mess and show them the resources to avoid future trouble. There are already laws on the books for many of the wrongs that have been done. Why don't we just use them?
Some excellent reads that spun off of Gena's post:
Added 11/24/2007:
Added 11/25/2007:
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