Have We Saved The Big Ships While Letting The Passengers Go Down in Their Lifeboats?

By
Real Estate Agent with Coldwell Banker Residential Brokerage

Have We Saved The Big Ships While Letting The Passengers Go Down in Their Lifeboats?

Bow section of tanker SS Pendleton grounded near Pollock Rib lightship six miles off Chatham, Mass on the morning of Feb. 19, 1952.

In response to an MSNBC.COM article - Banks repossessed 1 million homes last year - and 2011 will be worse - I posted the following response:

We've been very lucky in Anne Arundel County, Maryland. While other parts of the country have experienced high foreclosure rates, our local real estate market - despite nearly a 30% decline in value from the market peak in 2006-2007 - has not seen significant foreclosure actions. Less than 10% of our current active inventory are foreclosures. About 1 in 12 homes are flagged as a foreclosure in our real estate market and are often great deals and sometimes really are steals!!!

The real challenge as I see it, is finding a way to incentivze banks to work with homeowners before they become distressed, i.e., past due on their mortgage payments. Banks don't appear to be willing to work with homeowners who may need to sell short until they are in default, once in default then they're on the foreclosure track. It's a "chicken and egg" problem. If more banks were willing to cooperate with borrowers before defaulting on their mortgage, we just might be able to avoid more foreclosures.

To really get things back on track, we need a true spirit of cooperation between banks and borrowers. Ben Bernanke said in an interview on television the other day that one of the root causes of the last depression was the Feds allowed the banks to fail. Fifty years from now when we look back, will the real cause of the Great Recession be that we let so many homeowners fall into foreclosure? Will we have saved the the big ships while letting the passengers go down in their lifeboats?

In case you missed Mr. Bernanke's interview on 60 Minutes, watch below:

Posted by

Stephen Howell, Sales Associate, Coldwell Banker Residential Brokerage, Annapolis, MarylandIf you are interested in buying a home in Annapolis, Maryland or the surrounding area and want to tour any property currently on the market, or if you have a home to sell in Annapolis, Maryland and want a professional consultation on current market conditions, please contact Stephen Howell at 443-994-8043 or e-mail him at showell@liveinannapolis.com or visit his website at LiveInAnnapolis.com.

Stephen Howell came to Annapolis to enjoy the Chesapeake bay in 1994. What he discovered was a whole new lifestyle. Ever since Stephen Howell has been successfully helping others make the most of Annapolis, Maryland. You'll find that with the right professional by your side, you can Live the lifestyle and live, work and play in Annapolis Maryland.

Stephen Howell and Jackson (his hound-mix from the HSSC) maintains residences on the Chesapeake Bay in Annapolis, Maryland and Gulf Coast in Sarasota, Florida. He works in the Annapolis, Maryland real estate market. His website lets people search the Annapolis Maryland area MLS. Buyers can also search for waterfront homes along the Cheasapeake Bay. His website has current real estate data on Annapolis, Maryland.

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Re-Blogged 1 time:

Re-Blogged By Re-Blogged At
  1. Jacquie Cliff 01/13/2011 01:49 AM
Topic:
Real Estate Market Trends
Location:
Maryland Anne Arundel County Annapolis
Groups:
Out Of The Box!
Coldwell Banker Bloggers
Dedicated Bloggers
Annapolis, Maryland
Advice for Sellers
Tags:
maryland
anne arundel county
banks
foreclosure

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Rainmaker
1,402,543
Vickie Nagy
Coldwell Banker Residential Real Estate - Palm Springs, CA
Vickie Jean the Palm Springs Condo Queen
Great post! The sentence that resonated with me and seemed to wrap it all up is "To really get things back on track, we need a true spirit of cooperation between banks and borrowers."
Jan 13, 2011 01:44 AM #1
Rainer
34,945
Jacquie Cliff
Champions Real Estate Services - Lynnwood, WA - Lynnwood, WA
- Real Estate and Short Sale Expert

I absolutetly think we have!  Banks and the Fed are making massive profits, while the 'little people' are getting crushed!  Not sure what there is to do about, abolish the Fed?  Go back to the gold standard?  The mess just is getting worse and there is no one that can really stop it!

Jan 13, 2011 01:46 AM #2
Rainer
68,912
Laura Reilly
Real Living Real Estate Professionals - Redding, CA
Home Sales Realtor - Short Sale Team Member - Redd
Very very good post, well put..Thank you from California.
Jan 13, 2011 01:47 AM #3
Ambassador
838,906
Charlie Ragonesi
AllMountainRealty.com - Big Canoe, GA
Homes - Big Canoe, Jasper, North Georgia Pros

I wrote a blog http://activerain.com/blogsview/2048163/why-the-making-home-affordable-program-may-fail about this and why I think it is not happening. I am with you about what is the Right thing to do. But I feel unfortunately that the right thing to do may not make the most $$$ for those who have to make the right decision

Jan 13, 2011 01:48 AM #4
Rainmaker
3,245,014
Will Hamm
Hamm Homes - Aurora, CO
"Where There's a Will, There's a Way!"

Banks and the Feds, I always wonder what it will take for the american people to be back on the right course.  Great Post

Jan 13, 2011 01:54 AM #5
Rainmaker
343,918
Stephen Howell
Coldwell Banker Residential Brokerage - Annapolis, MD
Annapolis MD Homes For Sale 443-994-8043
Thanks for all the comments!!! Perhaps, instead of infusing banks with billions of dollars to prop them up and keep them from failing, maybe we should infuse distressed homeowners with the money so they don't default on their mortgages. The money trail would go from the Feds to the homeowner then to the bank. Seems to me that if we prop up failing homeowners, we'll indirectly keep the banks afloat. Aren't we priming the wrong pump?
Jan 13, 2011 02:11 AM #6
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Margaret Woda
Long & Foster Real Estate, Inc. - Crofton, MD
Maryland Real Estate & Military Relocation

Stephen your comment rings so true.  Just imagine if all that stimulus money had been distributed to the "little people" - I think results might have been quite different. (i.e., better)

Jan 13, 2011 04:18 AM #7
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Rainmaker
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