It's not just you! Everyone you know, and many you don't know, are in the same position as you. Some may not be losing their home or cars yet, and they may not show their financial pain, but I can assure you the belt has been tightened. Gas prices are completely out of control, food prices have increased higher than they have in eighteen years, and the stock and housing markets are more volatile than nitroglycerin riding on an old wooden roller coaster.
A recent quick trip to the local corner store for bread, milk, and creamer, comes as a daily request by my wife when I leave the office for the day. Add some gum and a quick snack cake for me, and the bill staggers close to twenty dollars. Repeated daily, these items will cost about $500 per month. We can easily pile on another $500 per month (if a 2 car family) for our gas usage. Combined, it totals about $12,000 a year simply for the meager and insignificant above mentioned items. Now include a mortgage, car payments, food and taxes; now the average American requires an enormous salary simply to survive.
My office staff; working with everyday people losing their homes, some probably due to these unrealistic rising expenses of the above insignificant items, continue to voice their opinion to me that something needs to be done about helping these people, and "someone" needs to do something. But it gets worse. Further indicators show that the credit usage index rose to all new heights last month, and continues to increase month over month. Experts predict that Americans are using their credit cards and credit lines for cash advances to pay their ordinary monthly expenses normally paid by their salary. So it's not just the people we currently work with that are losing their homes, its future possible people that show signs their riding the edge of disaster. I'm not a pessimist, but quite frankly I sense we have gone way beyond thinking this can be fixed by the efforts of one person. Although short sale agents sometimes think they can...trust me I know.
Meanwhile, lenders reviewing the current foreclosure situation and the growing financial epidemic should, in my opinion, take the "dropped ice cream-- two second rule" approach. Clean off what they can, cry a little, and enjoy the rest. Although devastating, the current foreclosure situation is still a small percentage of the overall housing market. In other words, the rest of the ice cream is still really good! So why is it such an impact? Well, Bank of America spent hundreds of millions evaluating the purchase of Countrywide Home Loans, the largest lender in the world. I'm certain this money would not have been spent if the upside potential on outstanding mortgage loans were not vast. Yet, the mortgage and housing crisis continues to create this impact. In my opinion it's every sector that's a problem, it's just that the housing market that creates the most fear.
I continue to argue that it's not going to be the effort of one person (or sector) to change the current situation, but believe that something can be done at a co-op level to help streamline the feared foreclosure issues faced by many Americans. Gas prices, although important, are dwarfed in comparison to an American family being homeless because of a lenders inability to deal with quite frankly "customer support" for the product they sold. Picking up the ice cream via a Zamboni is a solution not unlike hanging a picture with a sledge hammer. It's really more complicated than it needs to be, and the damage from the overkill could be much more severe. Deal with the issue timely, head-on, and provide many Americans solutions to calm these economic fears. Six weeks to simply evaluate if a solution even exists for a homeowner losing their property (normal lender response time) is not considered timely. During this six week wait, this person spends little or no money into the economy in fear of needing every dollar to save their home. This cycle played over again and again is why the local corner store proprietor where I stopped at is worried he will not make it and lose his home if things continue. The cycle now continues with him.
The overall problem in America stems many economical factors, mortgage lending obviously being one of them. Most proud Americans never expect this "someone" or white knight on the white horse to ride up and save the economy; most know this knight doesn't even exists, however each sector needs to be responsive and responsible when they know they're decisions impact the overall American economy. Let's keep people in their houses, and we'll work on the inflating gas and food issues with you...from our home!
My thoughts and best go out to Americans facing these hard times. Many are alongside you and yearn for the same outcome as you...to keep their American dream!
Frank Wible
RE/MAX ALL PROS
Foreclosure and Short Sale Agent
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