Much has occurred since that time in our Real Estate market. We were blessed with a strong market where most of us thought we were in "Bay Area Heaven". Sellers were happy with offers, and buyers were excited to jump into the market and make lots of instant cash like everyone else! Yes, things have changed. Those days are LONG GONE! The only gracious part of it all, realtors made money, banks made money, and sellers made money. The 100% financing led us into a frenzy of over-exaggerated appraisals which has led us into the problem of today.
I have continued to be a strong participant in the market, and a strong REO/foreclosure listing agent in the local areas. 2008 brought many sad days to many of those over-anxious and excited buyers in 05/06 with 100% financing. They are under water. Many foreclosures occurred. The moratorium both on the state and federal level in-acted to slow down the foreclosures and to assist some families has worked to a degree. The first-time home buyer tax Incentive (ending Nov.1,09) offered a strong stimulus to help get first time home buyers some buying power. The FHA also assisted with solid lending.
The issue at hand:
Banks now with extensive inventory on their books are trying many creative ways to release the pressure. As a REO/Foreclosure Listing Agent, I am experiencing a double standard. Appraisers/lenders have been given new guidelines from the ruling: HVCC. Great! This will preserve the home values from escalating out of control as they did in 05/06. It will preserve the right for first time home buyers to feel secure in a home value when writing offers using the FHA Program enabling them the opportunity to use the $8,000 tax credit.
So, if Obama promotes the re-building of our communities by helping the first time home buyers get into homes to re-establish our economy and family life, why do banks not abide by the same rules? I am seeing a run of cash investors pulling the "ALL CASH" over market value card and pushing out our first time home buyers options and opportunities for a tax credit (ending Nov. 1,09). Along with the ruling an addendum should follow. The banks should be required to accept a percentage of FHA Loans to help re-build our communities. A bank I represent undervalued a home based on true market, received 48 offers (most of which were FHA first time buyers with high hopes) and took the highest ALL CASH INVESTOR offer. This is occurring all over the area. Isn't this against the vision of the tax credit program? Or was it a way to appease the general public knowing that the option would never be used due to banks greed? Realtors are frustrated. But this has no comparison to the frustration of our buyers who don't get why banks list low and sale high.
What can we do?