Why I don’t think fraud or sub-prime loans are the reason

Real Estate Broker/Owner with Respect Realty LLC 200311024

We see banks folding and buyers being foreclosed on at a rate that hasn't been seen, quite possibly, ever. But, do I think mortgage fraud or sub-prime loans are the reason?

You see, I work with a lot of foreclosures, and the reasons I see for people going in to foreclosure are death, divorce, job loss and injury. None of these have to do with the type of loan someone has.

Yes, I do see the occasional ARM that can affect the ability for someone to pay, but this blog is going out to the mortgage industry. Not saying anything bad about you, but as the owner of four businesses in my life, you need to re-adjust your thinking instead of crying to the government.

I have a few ideas that I think may save you, if it isn't already too late. I do understand that some situations can't be helped when a home is involved. When a death or divorce is involved, there isn't much you can do. But, you can help!

Scenario #1

If someone should die in a family, and that is half the family's income, you know they are not going to be able to keep up with the payments. Help this family in their time of loss and stop the payments for a few months. Let them sell the home without the stress of the bank sending nasty letters and adding late payment fees. If there is no equity in the home, let a real estate agent find someone who is willing to take over the payments as they are, just for the chance to own a home. There are agents like me that won't mind getting paid $100 a month until my fee is paid, just to get a buyer into a home who couldn't before.

Scenario #2

If there is a job loss, the hardest thing for a person to do is be interviewed while thinking if they don't get this job their home will be foreclosed on, and the late fees are stacking up. If there is a job loss, keep charging interest, but tack it on to the end of the loan and give this person six months to find a new job. You won't get the home back via foreclosure and the home owner will continue to pay on time, once they find a new job.

Scenario #3

The ARM has adjusted and all of a sudden the payments have gone up by $200 or more. I know you have an agreement with these people, but if they have not had a late in two or three years and then you raise the
interest and they start to fall behind, this may tell you something. Instead of taking the house back, offer to lock in their rate at the old interest rate for $500.00 and waive their late fees. If you do this, I bet you will have a few less of these loans foreclosed on.

Scenario #4

I have discovered that injuries and medical bills are the number one reason for people falling behind on their payments. A lot of Americans, even with insurance, get into trouble when an injury happens. Instead of making it a profit center, like a lot of banks do, offer people who have loans with your disability insurance AT COST! You will end up helping these people and, in the end, keep one more home from going into default.

So, to the mortgage companies out there that are still in the business, WE NEED YOU and we don't want to see any home be foreclosed on. Start to think outside the box and give me a call, I have many more ideas up in my head that can help you and my clients, either stay in their home, or find a first time home buyer a home that they may not have been able to get into before.


UPDATE: Because of this blog I got invited to do a national radio show. Click here to hear the show.


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todd clark
things to possible do to avoid foreclosure in beaverton and tigard oregon

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David M. Childress
Howard Hanna Real Estate Services - Akron, OH
I would love to be your Realtor® in Akron Ohio!
As an agent that has worked with the people you describe above, I have to say those are great ideas and comments. Would you consider running for congress? We sure need some thinkers like you where they can do some good. Oh, you are doing good here!  Thank you, DavidC
Aug 19, 2007 03:21 PM #1
Jon Mitchell
Classic Property Management - Santa Clarita, CA
Hey Todd, I gotta ask...how old are you??  You have owned four businesses already?  You look like you couldn't top 30 yrs. old...
Aug 19, 2007 03:28 PM #2
Sheri Sanders
Berkshire Hathaway C Dan Joyner Realtors - Easley, SC
Realtor/Broker - Easley, SC Real Estate

Todd,  I couldn't agree with you more!  Great Post.  I'm giving you a 5!

Sheri Sanders


Aug 19, 2007 03:30 PM #3
Mary Warren
Las Vegas, NV
Todd...I fully agree...aren't mortgage payments temporarily waived or lowered when a person serving in the military goes to war?  Something definitely needs to be done...I just did a probate that was a nightmare, the heirs didn't have money to keep current with payments and association fees...the hoa ended up putting a lien on the property.  I was praying daily that the heirs were keeping up with the mortgage payments....there was plenty of equity to cover them if it had come to that.
Aug 19, 2007 03:46 PM #4
Eric Bouler
Gardner Realtors, Licensed in La. - New Orleans, LA
Listening to your Needs
You are right on the Medical bills that hit people and they have to refi and are desperate. They are interested in the loved one and will do what it takes. I have seen this over and over. A lot of elderly people get caught up in medical bills and have no where to turn. They must look like real suckers to some of these loan merchants. They are never local lenders so its hard to yell at them.
Aug 19, 2007 04:11 PM #5
Nancy Brenner
Referral Associates of Georgia, Inc. - Roswell, GA
Roswell Georgia Real Estate Agent
Great post, Todd.  Love that thought process of yours.  Am subscribing to your blog so I won't miss any of your creative thinking.
Aug 19, 2007 06:03 PM #6
Respect Realty LLC
Respect Realty LLC - Milwaukie, OR
Brokers - Oregon / SW Washington Real Estate

David - Thank you for the vote of confidence, but I do believe if I ever ran for anything, I would be one of the people that would be shot! I speak my mind way to often!

Jonathan - I am 37 years old, I started my first business when I was 12 and yet another when I was 17. When I was 18 I started a DJ business that I had until last year. Then during that 18 year stint as a DJ, I also owned a delivery business. That doesn' t count all the other little things I've done to make money, but those 4 are the ones that I actually had business license for.

Sheri - Thank you very much, I really do appriciate it. I'm now kind of excited, I get to be a radio guy again for a day. I've been asked to do a radio show on Wednesday about this post.

Mary - This is partially how I came up with the idea for people who have lost their jobs. The banks lower the interest rate to 6% and suspend payments while on active duty for the military.

Eric - Family always come first and big banks seem to forget that.

Aug 19, 2007 06:14 PM #7
Respect Realty LLC
Respect Realty LLC - Milwaukie, OR
Brokers - Oregon / SW Washington Real Estate
Nancy - Thank you, My mind wonders a lot! Process, Ramblings, what every you want to call it, I think we can bail ourselves out of this mess, if we just think outside the box. I'm not sure the mainstream news media would ever really want to report on something like my idea for the main reason that they would lose their headline stories trying to make us all out to be horible people. But, everyone of those reporters used a realtor and a mortgage broker to sell or buy their homes, but they won't admit that to use will they.
Aug 19, 2007 06:17 PM #8
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