I attended a preliminary grass roots foreclosure task-force meeting in Atlanta today with other real estate agents, loan officers, and real estate educators to discuss the ever increasing foreclosure problems that are plaguing our city and most others across the nation. Foreclosures are an ever growing problem. The consensus is that we have a major problem that is not being addressed by the politicians, real estate companies, the community, lenders, real estate organizations, or banks! It is a very delicate subject that no one wants to talk about. It is like discussing the uncle that has a drinking problem at the dinner table! No one wants to raise the subject, or acknowledge it! In fact, there isn't a problem! This situation is no different when you try to approach those that should be able to help in in our community. Just try making some phone calls! In an election year this is a political hot potato! You will be turned away at every level from the US Senate, state government and local government. It isn't their problem, you must be mistaken!
We spend more money each year on the imaginary threat of a terrorist attack, than on a financial system that can fall into collapse at any moment. We forget about the hardships imposed upon all! Political apathy in an election year is meant to close the doors quickly on anyone wanting to discuss real issues. "It's not my problem" shows you the door and a pat on the back to those trying to raise awareness, and find solutions to our problems. Have you forgotten the pledges of the Federal Reserve and our politicians that there is no problem? Greenspan, and Bernake said a recession would not occur? Did you believe them when they said it? Well are things turning out as they said? No! They've lied, and no one is calling them on it!
The fixes we were promised last summer from the government and our leaders were just cheap talk. It is like placing band aids on corpses. If you read the newspapers, press releases or watch the evening news, you come to learn the harsh reality that no one wants to really rock the boat! It's not my job! The result? Desperation is setting in many communities that do not know what to do or whom to talk to. Homeowners are giving up and walking away from their homes. From homeowner associations dealing with uncut lawns, declining home values, to police dealing with increases of vandalism, crack houses and squatters. The problem does not just affect those that are being foreclosed and the banks! It affects all of us! It is an item that we all want to deny, and we are complicate in our individual guilt. Banks do not want to acknowledge how bad things are and how many homes are bloating their inventory of useless assets which are declining in value and frozen. Real estate companies want everyone to believe it is an incredible time to buy! In the mean time, foreclosures are infecting every aspect of our communities, and will for some time to come unless we as good citizens act.
Since we make a living from real estate, who knows more of the ins and outs of how real estate works? As agents we have vast networks of clients, customers, and real estate sites that can host resources for those so desperately seeking solutions. We have connections in the media and statistics in each of our market place to share with the media, the community and politicians. As long as we breathe and live we are all stewards of this life. We have an obligation to correct wrongs when we see and identify it! Consumer counseling, identifying fraud, suggest changes in our industry and proposes substantive laws that may prevent such a magnitude of hardship from ever happening again!
Many in real estate believe the worse is behind us that recovery is just around the corner, it is not! It goes without saying that it will be at least ten times worse than last year. Politicians are ignoring the issue because they do not want to be questioned that they were all asleep on the job! They did nothing but satisfy their own political interests and lobbyists! To appease the public in an election year they offer a useless stipend in the form of $150 Billion in rebates! Where will it be spent? On retail! It is meant more as a bailout of our banks than any real type of fix. It took a lame congress no more than a week or so to come up with a meritless plot that will do nothing to correct the wrongs. Perhaps it will just appease their conscience.
As a nation we are distracted with American Idol, steroid use of sports players, and Brittany Spears! Who cares? Individually we all should. Denial is not a beginning, but a perpetuation of a really bad situation that will only get worse. We have an obligation to become vocal in our own communities, ask questions, bring statistics out into the light, and hold leaders responsible for their lack of action as public servants! We need to look for solutions for those impacted immediately, and assist others to act before it becomes too late. The fix is not just with the individual falling into immediate default. The solution has to be multifaceted. If we focus on fixing one individual, 100 more will fall into the same trap! We are running out of time each time we say "It's not that bad!" We need to start acting now! Have we forgotten it is all about "We the People?" What can you do? I know I want to be involved! I like real estate, and I love our country, but it needs work! The politicians aren't doing it! Contact them to let them know they've failed us! The solutions may be found in each of us!
Gayle Balaban/Norris Lake Tn. Real Estate I think we have a responsibility to to set things straight. In my books, I would like to start with the politicians! They started this mess with the repeal of the Glass-Steagall Act I suppose in Washington they weren't getting enough kick backs from lobbyists! What was the cry in Washington after Enron? Corporate responsibility? Has the head of any bank been indicted criminally? Countrywide? Appraisers? Real estate agents?
Thanks for bringing this issue up Jim. I believe both parties just want to speak about to show they seemingly care. However, none of them have a plan to fix anything. We have a habit in America of not addressing a situation until it's dire and the consequences are abysmal. I believe this will have to be solve at the community, city and state levels. Massachusetts is taking the lead with their stance against Fremont Mtg.
The repeal of the Glass-Steagall Act was the seminal event that permitted corrupt financial giants from Fannie Mae to Countrywide to Credit Suisse to use the American home buyer to finance gargantuan profits.
The government have no power to save the public. Once they secure the financial markets, they'll be on to something else.
The foreclosures are a natural progression of the market fixing itself. They have to happen. The American home buyers were raped by the financial giants who will lose a little profit.
Clinton was just paying off a few debts. The people he put in Fannie Mae were there for a reason. They had to keep the lid on the vulcano until the Clinton library was funded and the foundation for Hillary to run was in place.
Jim - NOT that you are behind but, there was an article about a similar group here in the Raleigh area back in July. Here is a link to the article - maybe you can get some ideas from it. WRAL Article You are correct in that SOMEONE has got to start somewhere to start the education, stop the rumors and make a difference. Thanks for yet another insightful post!
Klarque Garrison, "Mr. Short Sale" May we use the phrase "Post mortem?" That is the result of waiting too long. Then it is all about finger pointing and still not accepting responsibility.
Homefinders, Real Estate in MD & VA, Lenn Harley, Broker, New & Resale Homes Amen! Lenn you have a gift of being able to see the "Big picture" and understanding all immediately. I agree the foreclosures are a major part of the healing process also. In my humble opinion there are just better ways to handle the event.
Leesa L. Finley, REALTOR® Thanks! Good article, but since it was written we have had a major eruption of a foreclosure plague. In some places in the USA...I was reading an article that this years foreclosures are up 540% over last year! Places that had none are now inundated like the black plague. I would love forone person here on Active Rain share that foreclosures are not even a problem in their community! This is really a blight upon the land!
I can certainly NOT raise my hand and testify to that! It is insane! We use to be able to discount one foreclisure in comps but NOW? Quite difficult when you have a seller that is truly just wanting to sell because they are transferring or moving up - I walk in with a list of comps and they are 90% foreclosures......HORRIBLE!
Leesa L. Finley, REALTOR® That is the problem! It becomes everyone else's problem when the politicians have their heads in the sand until election day is over! Neighborhoods go into further decline when your relocating seller cannot sell! It affects other neighborhoods when a seller in one subdivision cannot sell to move up or trade down! A real domino effect!
Homefinders, Real Estate in MD & VA, Lenn Harley, Broker, New & Resale Homes I think that Andrew Cuomos lawsuit was one. Correcting the mess we had in appraisals. Raising the Fannie Mae and Freddie Mac is a bad idea in my opinion...it will just prolong the problem! Legistlature that dismantles the new law that replaced the Glass Steagall Act would be another... If we do not change the fundimentals that caused this we are doomed to repeat them again.
Jim, Not only is the sum offered paltry, but the most of the resets and foreclosures will be over by the time of the general election. The "promises" of the likes of Hillary are typical Clinton campaigning. Maybe we'll at least put some baseball players in jail since that seems to be a priority.
It is said Congress is not productive in an election year - they haven't been productive since the last election, but we should be happy they don't spend more time "working" Karen
Fannie Mae is at a level of January 2003 when the average price for a detached single family home in Fairfax and Montgomery was $481,000. Figure $417K and 20% down or an 80/10/10 or even an 80/15/5, the conforming was reasonable for the market.
I don't believe it's reasonable for the market today and that is one of the primary reasons why conventional home buyers are put in "exotic" loans. They don't have an $80K down or 2nd to buy, they need a $350K 2nd or down to buy.
Fannie Mae lags the market. I would be happy to see it go up to perhaps $517K. That would be reasonable. FHA won't help that much for the average priced home. Raising the Fannie Mae to $729K or something for a year doesn't make any sense either. Although it could help refis. Unfortunately, the premiums for Fannie Mae conforming is gouging buyers.
Homefinders, Real Estate in MD & VA, Lenn Harley, Broker, New & Resale Homes I agree this a total mess, but the time they make a decision in this market the market has already moved past that point. So, too little too late. Also the longer we take...the more confidence is last by buyers. I also have to remember price differences in Market with Fannie Mae and Freddie Mac...thank you for the reminder!
Tina Maraj Shah Realtor Thanks so much, but it also about all of those that we cannot help. As Realtors we need to help our communities on many levels!
Yes, foreclosure is a problem and has been for a while! As I've said it before, I believe we have been in recession since last fall. Perhaps not technically as the "experts" may say... but what the hell... we're in deep doo do and we need help. PEOPLE need help!
Just wait until gas hits $3.50/gallon and then $4.00. Price of grocery has climbed. Oh boy, wait to see the cost of building supplies. New construction should slow down further due to fuel prices and as inventory is already HIGH from lenders choking the home buying process with so much tougher restrictions!
The lenders loved making billions and billions of dollars back then. Now, are they truly trying to help the average buyers by CHOKING the lending requirements? Who has a perfect credit these days? Not too many, I'd bet.
Let's let Optimism Rule! Let's once again raise the flag Right Side Up With JIM!
Roger Hollingsworth $9 a for petrol? Ouch ouch ouch! That is not good at all! I do no tthink this is over by any means! I believe this is just a begining rather than an end.
I have just read an article by Lawrence Yun (NAR Economist) reproduced in our trade journal - he seems to be laying the blame firmly with the Ratings Agencies. Is this an opinion shared by others?
If S&P and Moody's are come under pressure to take a more conservative view - how are the monoline insurers (MBIA and Ambiac) going to hang on to their AAA ratings?
Government guarantees will be needed to prevent major sell-offs by Pension Funds etc.
I pay $10 a gallon for diesel - only Farmers and Airlines get cheap fuel in the UK !!!
Roger Hollingsworth First of all NAR has to deal with more Public Relations (PR) and damage control. To promote the interest of its members, and the public they serve...emphasis has to be on the positive more than substance of fact. That is why to the National Association of Realtors it is always a great time to buy.
For NAR to blame the rating agency's is a complete denial of fact. Banks and lenders made bad loans because of their greed, and turned those bad loans into bad investment instruments and sold them round the globe. That is a big reason why Northern Rock went under. It wasn't bad British loans...it was bad paper that they were greedy enough to buy from the states. The rating agents perpetrated the fraud by saying these were good investments...when they knew they weren't! To say a patient has a 50/50 chance to recover is a lie if the patient died 2 hours ago. An analogy? This is all a classic case of an intervention on pathological liar - and now the stark realization is they have to face the truth! There is a major reckoning ahead to be faced by all!
Who sold home buyers their homes? Who usually recommends banks and lenders on getting home financing? REALTORS!
Let's not leave Realtors out of the equation for the current housing mess! I don't believe we can blame the current foreclosure and housing crisis entirely on banks and lenders. Many REALTORS were HIGHLY eager to make any and all sales which ever way without perphaps consious and/or knowledgeable thought about the "what if's" of the buyer coming towards end of their teaser loans and refinancing. If they did, and if they did discuss with their buyer clients, who would have ever imagined that borrowing would have become a STOP sign across the board where nearly everyone with not so good credit would have difficulty getting refinancing.
Yes, Banks and Lenders are nearly ALWAYS greedy. They are greedy for their stock holders to make PROFITS. The stock holders are people out in the community and not merely and just corporate "CEO's, CFO's," with millions of dollars to play with on investments.
I've come across many bad and selfish Realtors out there in the world. And based on that, I know Realtors have a BIG part in the current housing crisis! That may be a generalization, but I stand firm on my belief.
NOTE: I for one HAVE always recommended to my clients to take out FIXED loans. And if people were financially capable, then take 15 year loans instead of 30 to pay down the loan faster and to get more equity earlier.
Finger pointing time is over.
The NOW is working towards FIXING the problem by helping to stabilize the real estate market and to build back confidence in home buyers, sellers, and lenders!
Consumer confidence will be hit in weeks to come as the Feds move closer to lowering the Fed Rate 2% from what I'm hearing. Also, we can expect unemployment rates to start climbing as the cost of services and goods rise as fuel prices keep on CLIMBING to record HIGHS.
We need help to stabilize FUEL Prices before the housing situation is improved!
That's my $1.25 opinion. (No longer a 2 cent opinion due to the cost of fuel.)
C. KIM McGuire Kim, now tell us what you really feel without holding back! LOL! I agree the equation is all inclusive. That is why I wanted to join this Grass Roots Foreclosure to see what can be done by each one of us at any level! I am adding above US Senate Contact List. I also believe the politicians allowed much of this to occur! They need to know it from their constituents!
LOL, I can't hold back anything on my mind. I'm a straight shooter. Life is too short to beat around the bush, cheat, lie, steal, and anything else not kosher. We all have to earn our credits as best and fast as possible and be privileged to enter heaven's gates. And hopefully then, enter flight school to earn our angel wings to help creatures on earth. "-)
What a complex situation that the U.S. economy, and world economy for that matter, is in. USA practically drives world financial markets still. Therefore, the WORLD has a stake in our economy getting better sooner than later.
I truly believe that the cost of FUEL prices have to be contained and controlled back to $250 - $275 per gallon in order for the rest of the economy to improve. The cost per barrel of oil has risen too sharply and QUICKLY for the economy to absorb such a SHOCK. A massive RIPPLE affect is happening across all segments of every employment. The hardest hit will be the Small Businesses that drive and sustain our economy and neighborhoods. Start looking at small office/store fronts that are closed now. Then look 3, 6, 9 months from now. Will there be more vacant spaces?
Some local - limited solutions to sustain communities during tough economy and high fuel prices.
Neighborhoods need to support each other by learning and practicing to spend at local places more than shopping out-of-areas. This needs to be done for a while to sustain local businesses and employment.
People who drive gas hogs need to get other vehicles that are more fuel efficient; or perhaps, they just need to drive their second vehicle that is more fuel efficient.
People need to car pool. Builds closer bond with wife, husband, and kids. Builds friendships, and starts new ones.
People need to use public transportation if they are available.
People need to use bicycles if they are within a close range of work, stores, etc.
People need to combine errands so as to limit the number of trips made to stores, etc. Thereby, burning less gas.
People need to call on each other (or send an Email) to see who's in town to pick up this or that if they have time. Otherwise, "Hey Mark and Cheryl, I'm headed into town, you need for me to pick you up anything?" "Yea KIM, how about picking us up a pound of minced garlic." "Okie dokie."
Oh, I can go on and on....
Where are the Harvard business experts now? Is it a book worm thing for the economy as an immedite fix or a natural progression of time and various activities falling into place?
Things WILL only get better as history has shown! So, I can only be Optimistic based on statistics!
C. KIM McGuire I agree! Fuel costs are the straw that broke the camels back. This is going to be a long road back! I am looking at the MLS in Atlanta tonight,a nd it is amazing...foreclosures, short sales, pre-foreclosures take your pick! They are all over the place, many are real estate agents own personal homes. When I look at them...they over paid, brought homes that any experienced agent would know sat on the market for a long time before they purchased them. They were the patsy's! The situation was compounded by 100% financing, and then refinancing. Many took our second mortgages I guess to borrow the money for the rehabs or home flips. I am certain they also borrowed agents future equity to buy the big Mercedes. It is a very complex situation and will permeate most of the economy before it is through.
I'm very worried and sorry for all who have lost their homes and/or are in the midst.
Yes, there are Realtors that I know also who went on real estate buying binge stretching themselves with special loans. I've even seen new construction that some Realtors thought that they too can become builders and sell at incredible profits. Perhaps in the past that they did. Then, they got caught up QUICKLY in the tornado of lending crisis and banks freezing any lending. This led to them holding onto their projects too long and forcing some of them to give back the new homes to the banks/lenders.
I've seen Realtors who have been in the business for a long time and riding the free and high rich life without having to really work hard. Now they don't know what to do because they don't know how to really work, hustle, and SERVICE customers by bending over backwards in doing the right thing. How do I know this, because their former clients are telling me this, LOL. Or, sadly.... bad news. I hate to see anyone down and out.
I, myself, are hanging tough as a single income dad. Thank God I have multiple skills. Of course I'm not using my college degree directly, but more of my mind and hands. I do home restoration and repairs. I've got a proposal to submit on two large condo complexes. I'm just finishing up on a kitchen remodeling project. I had to hire couple of people to help me. Well, I actually hired them to help them because they needed the work. I should become an employer. No, never mind!
I hope all is well with you and your wife in the business.
C. KIM McGuire Kim you have some great insights. Real estate was never really a slam dunk market even in the past. The 1980's were full of cheap homes and 16.5% interest rates. The market collapsed pretty much after 1988 - to the early 90's and started an incredible climb up. In the last few years there was more appreciation that maybe the last 50 years. Unsustainable appreciation as we are now finding out. A true asset bubble. I personally think we are going back to normal times. They are driven by need instead of greed. Not every listing is a guaranteed sale...and most in our real estate market do not want to hear that line...,but it is true. In the 90's we had 8500 agents and sold abuot 2500-3500 homes a month, not 6800 homes a month as we have in the last few years. Now we have 41,500 agents and sales have fallen back to 2400 a month in Metro Atlanta.
Success is going to be marked in the coming years by hard work, dedication, practical solutions, and by offering service that no one else will be willing to do. There will always be those that do well even in soft times. I really enjoyed speaking with you this evening! You are a true professional, you are going to do very well! A favorite verse of mine from scripture is from Jeremiah...
Jeremiah 17:8 He will be like a tree planted by the water that sends out its roots by the stream. It does not fear when heat comes; its leaves are always green. It has no worries in a year of drought and never fails to bear fruit." Jeremiah 17:7-9
It was a pleasure talking with another professional with knowledge about what they do and why they want to do it!
We have to stay tough, strong, healthy, sustainable, smart, and CREATIVE in this fire ball of a market.
We have to "eat our spinach" as Shirley Temple use to sing so well and preach!
Yup, she embedded that in my mind!
As I've always said, anyone can think "out of the box" and use that tag line.... it's one who can think in the box, around the box, on top of the box, even under the box, and then come up with an executable plan that is actually implemented and tested in order to get from Point A to Z.
There will be zippity, yuppity, zig zags along the way and Dr. Seuss hiccups and gibblings and goblins trying to thwart one's success, but fear no wanton neotany heads.... for success comes to those with happy feet souls with OPTIMISM and Good Doer Attitudes!
Don't work too late,... we'll be one hour older on Sunday! Ouch.... body aches. LOL.
Hi Jim. Excellent post - one writer above alluded to the 'post mortem, which is where we are right now. My concern is that the problem is just too big for Realtors to deal with realistically but I'm even more worried that anytime the government gets involved it only makes the problem worse. They have no concept of the long term consequences of their actions - which is how we got into this mess in the first place. Nobody, NOBODY wants to take responsibility for their own part in this melodrama which makes it harder to effect solutions. Let the Fingerpointing Begin.
Gene Wunderlich Selling Southwest CaliforniaThanks Gene, but I really thing we are just getting into this. We have power as citizens to contact our representatives at every level and let them know they need to be on board for this. Some of the problem is even accountability! Did the US Federal Government enforce the laws, the over site? Or were they just as guilty on this as they were on closing the borders, Katrina, NAFTA? So do we give them all a pass and vote them in office again next year? That may be the strongest message we can send. Business as usual will not be tolerated.
I agree - they didn't enforce what was already on the books (predatory lending , etc.) nor the oversight. Now they'll do some knee-jerk reactionary stuff that will only make it worse. I would love to be able to vote them out, unfortunately that doesn't happen either. California is run by the biggest bunch of liberal wacko's you'll ever find congregated in one place. They screw up one thing after another, taxes, transportation, our budget is a joke, our record on employment is abysmal yet these clowns get re-elected time after time and when they are finally termed out, they elect somebody even worse, Sorry to rant.
Please keep us informed of your efforts. I'm sure we would all like to be part of a solution.
Gene Wunderlich Selling Southwest California Some political reform may be necessary term limits, ban on lobbying, campaign contributions must be addressed. We must reclaim our country.
Jim Crawford ~ Atlanta Real Estate-ABR E-PRO
Atlanta, GA
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I attended a preliminary grass roots foreclosure task-force meeting in Atlanta today with other real estate agents, loan officers, and real estate educators to discuss the ever increasing foreclosure problems that are plaguing our city and most others across the nation. Foreclosures are an ever growing problem. The consensus is that we have a major problem that is not being addressed by the politicians, real estate companies, the community, lenders, real estate organizations, or banks! It is a very delicate subject that no one wants to talk about. It is like discussing the uncle that has a drinking problem at the dinner table! No one wants to raise the subject, or acknowledge it! In fact, there isn't a problem! This situation is no different when you try to approach those that should be able to help in in our community. Just try making some phone calls! In an election year this is a political hot potato! You will be turned away at every level from the US Senate, state government and local government. It isn't their problem, you must be mistaken! 
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I am not sure that there is a solution within our realm