TRUTH IN LENDING
This country is quickly spiraling out of RE economic control. Here is the scenario. House #1 goes into Foreclosure because an ARM and value drops. Bank forecloses and lists the house on the MLS for 55% of the original loan. Now this is where the domino effect starts. Now the neighbors see this house which is comparable square footage lot size etc, to their home. So why should they continue paying on a mortgage that is higher than the property value? Even though they can make the payments the lender will not do a loan modification comparable to the current value. So they walk. And so on and so forth thru out the neighborhood, then the city, then the county, then the state and now the whole country. This is what is happening here locally and I would imagine ac-cross the country.
Where will it stop? Why would anyone even buy knowing the market is still dropping? There is a solution and the lenders should have a plan to correct this. Instead they have received billions of tax payer dollars with no plan to stop the hemorrhaging. We need a plan. For very owner that walks, we lose! First their credit is ruined so less money will be going into the economy and since there is no debtors prison, why shouldn't they walk?
Lenders have got to catch up and face the reality they made a fortune in loans from 2003-2006. Now it is time to pay the piper for giving loans to those that are now unable to repay them, whether because they are sub prime, adjustable, interest only, or mostly because the value of the home has dropped below the loan amount. The only way to stop the Free Fall is to renegotiate these loans in trouble and I don't mean just the ones people are behind, and take the loss up front!! It seems the lenders are still playing by the 1989 Foreclosure market rules. That will not cut it today.
It is costing people and businesses not only their homes and income but has put a great burden on every citizen in the United States. Our Economy is faltering. The deep pockets have holes in them. I for one is MAD AS HELL AND SICK AND TIRED!!
What to do? If you or your clients are in this situation call the lenders and be TENACIOUS. We are no longer Realtors we are loan modification specialists and it is up to us to stop the downward spiral. As a group we are strong! As much as our goal has been sell sell sell we need to stop and take note!!
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