I began a short sale in late spring of 2009. Since then, we have received a total of 3 offers on the property. Two were flat out rejected.
Here is the story on that second offer... Buyers toured the property with their agent. Agent contacted me about making an offer. I told them that based on my conversations with the lender, an offer of $250K would work. I let the agent know it would be best to put in a full price offer, which the buyer's did.
After a couple weeks of waiting, I call the bank only to find out that the offer was rejected. They didn't even bother to counter!
In the meantime, the lender contacted my client, the seller, and offered a modification. Basically they would forgive the 5 payments that had not been made and lower the interest rate permanently. Now, that sounds like it could be a good deal but let me tell you why in this case it was not.
The home was worth $400K at the peak of it all... Now we were struggling to get an offer of $250K. The homeowner's property tax paperwork for 2009 shows the assessed value at $280K. The homeowner naturally made this known to the bank and suggested they lower the principal owed. No go said the bank.
"But wait a minute," said my seller, "You are willing to sell this in a short sale to someone else for less than what I owe. Why can you not sell it to me at that price?"
Naturally the answer is that banks don't want to encourage irresponsibility. They don't want clients thinking they can get away with buying a home for one price and then renegotiating later. Now, isn't that what's happening higher up the chain?? These lenders are asking the Treasury for a bailout, an "injection", an "infusion." Call it what you want, they certainly have no problem asking for a break. But damn their clients if they need a break.
In this time of unprecedented financial turmoil, why is it not possible to reset home values, reset existing mortgages and move forward? Why has it become necessary to displace so many families?
I am happy to hear any explanations as to why this kind of solution is not an option. I mean, the banks are now willing to become landlords for goodness sakes! That means hiring property management, repair expenses since these are no longer the homeowner's responsibility... How can they offer a lower monthly payment when becoming the landlord actually increases their expenses on the property????
Friday, November 13, 2009
Keeping Home Affordable Only Works for a Select Few
Nine months ago, the Obama administration offered banks $75 billion in taxpayer money to rework troubled mortgages.
So far 650,994 homeowners nationwide have received temporary, trial modifications under the administration's foreclosure-prevention plan.
However the Congressional Oversight Panel reports less than 2,000 borrowers had successfully completed their trial period and received permanent loan modifications as of Sept. 1.
Now I'm no statistician, but those are some dismal results.
So far 650,994 homeowners nationwide have received temporary, trial modifications under the administration's foreclosure-prevention plan.
However the Congressional Oversight Panel reports less than 2,000 borrowers had successfully completed their trial period and received permanent loan modifications as of Sept. 1.
Now I'm no statistician, but those are some dismal results.
A moment on the soapbox
As an active Realtor in Utah, it is my desire to see people become homeowners. Homeownership creates pride and boosts self respect which in turn strengthens communities... Sadly, these are truisms the government and lenders are only giving lip service to.
The Constitution begins with the words: We the people. When are "we the people" truly going to come together on this issue?
The Constitution begins with the words: We the people. When are "we the people" truly going to come together on this issue?
Monday, November 9, 2009
Homebuyer Tax Credit Extended and Expanded
So this past Friday, President Obama signed the bill extending the First-Time Homebuyers Tax Credit to June 30, 2010 making the new deadline for being under contract April 30, 2010 with a closing date no later than June 30, 2010.
Key improvements to the bill are the increase in income limits. For homes purchased after November 6, 2009 and on or before April 30, 2010, single taxpayers with incomes up to $125,000 and married couples with incomes up to $225,000 qualify for the full tax credit.
For up to date information on eligibility and requirements, please take a look at these websites:
http://www.irs.gov/newsroom/article/0,,id=204671,00.html
http://www.federalhousingtaxcredit.com/glance.php
Key improvements to the bill are the increase in income limits. For homes purchased after November 6, 2009 and on or before April 30, 2010, single taxpayers with incomes up to $125,000 and married couples with incomes up to $225,000 qualify for the full tax credit.
For up to date information on eligibility and requirements, please take a look at these websites:
http://www.irs.gov/newsroom/article/0,,id=204671,00.html
http://www.federalhousingtaxcredit.com/glance.php
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