Happy Thanksgiving from Sylmar, Van Nuys, The San Fernando Valley and the State of California. We are still lending, home loans, loan modifications, mortgages in Sylmar, Van Nuys, The San Fernando Valley and the State of California.
Well this has been an interesting year to say the least. I have been watching the Government reaction to the credit squeeze and I just can't understand why we just keep giving big bucks to the corporate structure. It seems like the correct action to take but I wonder if they might go a different way.
I mention this because I've spent most of the last few months realigning myself to work hard for REO business. I understand the business and I am exclusively working with Realtors that sell and list REOs. The grapevine says that we are about to have a big slowdown. Basically the banks are not foreclosing due to the fact that FNMA and FMAC have decided on a moratorium until January 9, 2009. It takes about 3 weeks or so from a bank getting a property to the property getting on to the market. With no new activity we can expect a cleaning of the pipeline and then we hold.
So, what might help? I hate the idea but we really need the economy to get out from under the housing collapse. I believe that all can be healed if housing prices will stabilize and increase. Just this year I have worked in an area where the average month depreciation is around 3%. That's monthly not annually. I think the Gov. should stop bailing out the guys that bought the secondary market paper. I think if the tax payers are paying for it that we should go direct to the source. Bail out the individual homeowner.
Guess what, we made mistakes. Some people got loans they should not have. Some of it was created by the brokers, some by the lenders, much by the greedy homeowner who bit off more that they can chew. Whatever the reason, it no longer matters. The theory is simple. Line up all borrowers and modify all the loans. Many people suggest that there would be no incentive for those that are paying to pay. Well there is not now. I know several people that have made a conscious choice to not pay so that they can get a modification. What if we modify all the notes to current value and set a base rate? It hurts but only once and the dollar loss is spread across all instead of the tax payers giving it to the bank and trying to regulate what they do with it.
In the end I believe that the market would be stabalized. Some will still not make it. That's ok. We can use the traditional foreclosure method and keep moving. Thousands will get relief and we can say that the bottom is here. So far we have spent over a Trillion in bail out and as far as I know none have really gotten relief. The new rules are hard to qualify for even if the bank is willing to modify. Lets just take it right to the people. It's radical and I firmly believe it's coming.
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