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TFBE #2 Back on Track

By
Real Estate Broker/Owner with WEICHERT, Realtors®-Towne & Country 60937

OK back on track today. But first I must make one quick rambling thought about foreclosures. I can't figure out these lenders. They don't want these properties, right? They have quit foreclosing in many cases, which in effect allows a person to live for free in the home with NO incentive to maintain it, or they allow them to sit empty and deteriorate which costs them money. They buy them back at the court sale 95% of the time, bidding against all other purchasers, (there are many reasons I know and that is for a later post), they will not sell them to investors for the price they are willing to pay, owner occupied buyers can't get financing on them or they will not qualify, they will not lend to non-owner occupied buyers, what is the deal. Are they waiting for some miracle? At what point do they just cut their losses and go on? I know it's a huge problem, and the solutions are overwhelming, but pick a solution or a plan and go with it.

Here is my solution, free of charge. Allow investors to either assume the old mortgages, for a set number of years like 10, up to say a set number of properties like 5, or loan them the money to purchase them at a good rate, with the option to lock them in for a set rate for a set time period. Then they can rent the property out to cover their payments, fix it up and sell it, or wait until the market turns around and do whatever they want. ( I will volunteer to br the first to take my 5). The government could even offer tax credits and or rent subsidies to help cover any negative cash flow or guarantee rent for qualified renters. Either way it accomplishes several things. 1. It gets it off the bad loan books, and in theory will reduce inventory 2. It allows the investor to maintain, repair, improve the property which keeps the long term value of it more stable, and to grow their wealth in a business they are already in anyway 3. It gives the old owners and people who can't afford or qualify to buy a home a chance to have a place to live, 4. It will cost us, make no mistake we are paying the price for it anyway, a lot less than the alternatives. Sure it's not perfect, some will cry it is making the rich richer, and there will no doubt be some problems with it, but I think it makes sense. If anyone has a better idea let me know.....  

Comments (1)

Anonymous
pat meyer

I  have done a few foreclosurers and never got one closed as their are exactly the problems you refer to-and your answer is a very good one-but how do you get anyone to listen to you?

Dec 02, 2008 08:52 AM
#1