I was called into a conference room in my office today, to help a couple decide what their options were in regard their housing situation. One of my agents, Dolores Soler, had met this couple while out door knocking. You see, this couple had purchased their Long Beach, California home back in 1999 for approximately $190,000.00 which was full price back in those days. Over the last eight years they had refinanced their home 3 times to the tune of $450,000.00 and now were three months behind in payments; yet, they had still not recieved the invevitable, notice of default. My God, if they play their cards right, they might like the other couple I talked on Monday Night, get to stay in their foreclosed house for up to a year without paying a dime. Yes, in some cases the Banks prefer the properties to be occupied instead of vacant and vandelized. Vacant and Vandalized.....sounds like a good name for a heavy-metal band.
So imagine that in the last six years alone, home prices in Southern California had, until last year, have gone up approx. 150%-200%. With the lure of cheap money, Americans flocked to the banks to cash in to pay for a assumed lifestyle, that was really atificial in its origination. Now, this is really nothing to joke about, but the perverbial ATM machine in the living room is bone dry. And there is no place to go for additional cash! It has been estimated that in the last 2 years that 25% percent of domestic spending was based on borrowed money from home refinancing. Unfortunately, often these days, I feel more and more often as if I'm directing traffic on the deck of the Titanic...It's like this: OK you have several options:
A). When you hit the plain truth and explain that they can opt to do nothing and just lose their home in the foreclosure and totally blow their credit, at least for the next 4 to 7 years....until the next generation of sub-prime loans resurrects from the grave to save the day and so on and so on. .. I have witnessed their eyes kind of glaze over when they realize that they might actually lose out on another home buying opportunity in the near future. Afterall, you mean I might not get another opportunity to spend another $250,000.00 on I-pods new cars, mindless commercialism? You might aswell impale me by throwing me off the South Tower. After all, how am I going to keep up with the Jones when I can no longer borrow. Afterall, they cashed out over $250,000.00 in last eight years with their last home purchase....and isn't it kind of inconvenient not being able to do that again? I mean this is America and owning a home, or maybe I should say, borrowing on a home is the The New American Dream.
B). The Foreberance. Take an already finacially strapped Family that can't make their current $3000.00 a month payment, have them sign a document that because they are already $12000.00 behind that they can stay in their home under one condition: Pay the bank only $4000.00/month for a year and then they will be all caught up, out of foreclosure, and live happily ever after. Statistically, the only real negative side to this approach is that it, rather inconveniently, forces many young families into the growing crime of Bank Robbery in their desperate attempt to hang on.
C). Bankruptcy. Oh yes, go ahead and file. Just wait till the 109th day of the 110 day foreclosure process in our non-recourse, "Golden State," That's right folks, California is the known as the Golden State. We only have approximately 50000 households involved in the foreclosure process, not bad considering that there are like forty million Californians, right? But Bankruptcy isn't as easy this year after the credit card companies very successful lobbying last year. Oh well. just remember you had better pay the court fees and the attorneys too!
D). The Short Sale. Now, I'm approximately 6'-3" and weigh in about 270 lbs. Does that mean I won't qualify for the short sale? Hey wait a minute that's not fair. Everyone needs to write to their Congressmen because size does matter! We need to turn this battleship around and start doing TALL SALES!!! When after going through all of my gesticulations and explanations and theories and the shocked client finally realizes that there is no money in it for him? What, you get a real estate commission and I get the boot? You mean everyone in the feeding chain gets to cash in on my misery except for me?.....How about a medium height sale, instead?
Perhaps I better just keep my mouth shut and not say anything at all.....the last two couples in foreclosure left my office with rather light complexions.
Comments(20)