I know this is not the most likely thing to happen, but I think to cut their losses the National Banks should start selling their homes Contract for Deed.
They would have to open a new department to process the contracts, but after that it should be like any other loan as far as processing the payments.
By doing this they would be able to sell homes faster and for more money. Many of the people getting foreclosed on are not bad people. Perhaps the qualification would be that someone out of foreclosure and bankruptcy would show steady income for 1 year and be buying a home on Contract for deed for a fair amount under their former home payment.
There are many people that bought too much house and had $2500 payments that could easily make $1500 payments and currently in the Minnesota market there are good homes that would equal the $1500 payment available.
This would tighten up the inventory much faster and cause the prices to turn around. There are too many vacant homes out there and many people that need to get in a home but can't because of their credit.
What do you think?
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Chuck Carstensen is a Realtor with The Discovery Team at RE/MAX; helping buyers, sellers, and investors of residential real estate. He is a Dynamic Life Coach; The Discovery Coach - "Helping you discover your talents, desires and purpose." Carstensen is a speaker and co-author in the best selling book series Wake Up...Live the Life You Love: Your Wake Up Moments (available this winter).
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