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Matt’s Take on the New’s
September 2, 2010

Foreclosed On—By the U.S.

Serena Ng and Carrick Mollenkamp from the Wall Street Journal wrote an article about a problem our woeful government has inherited. When our government decided to bail out the thimble heads from Bear Stearns, they inherited a portfolio of commercial and residential real estate. Guess What? The government is about to foreclose on many of these parcels! The authors are quoted, “It is an unprecedented test for the most powerful of 12 regional branches of the Federal Reserve System. In its 96-year history, the Fed hasn’t made or controlled loans to U.S. citizens and businesses outside of banking since the 1930s, when it was done on a much smaller scale. Now, under the watchful eye of Congress, the New York Fed must recoup a $29 billion loan secured by the Bear assets.”

For the Fed to come in and foreclose on properties puts it at some reputational and political risk,” said Vincent Reinhart, a former senior Fed staffer who is now an economist at the American Enterprise Institute. “If the Fed can’t figure out how to recast the terms of these mortgages and work with borrowers—it’s emblematic of the problems the government has had with other programs over the last year and a half,” he added.

Click on the link to read the rest of the article. It may add some humor to your day!

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Matt’s Take on the New’s

August 31, 2010

The New Face of Foreclosures

AnnaMaria Andriotis brings us an article that highlights the growing problem of foreclosures. While Florida, California, Arizona and Nevada account for 50+ % of the nations foreclosures, the problem is spreading to smaller communities around us.

During the first half of 2010, nearly 75% of all metropolitan areas posted increases in foreclosure filings. An 8.3% increase in foreclosure filings was shown as compared to the same period last year. While nasty mortgages attributed to the first wave, nasty mortgages, unemployment and job cuts continue to bash the markets.

The foreclosure filings , subsequent foreclosures and sales of bank owned properties will continue to depress the market for years to come. If you’re not involved in this market now, you need to be.

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Matt’s Take on the New’s

August 26, 2010

Superman Comic Saves Family Home From Foreclosure

Ray Sanchez from ABC Action News brings us a real life story about Superman! I thought Superman was a fictional character! In this case he (well…maybe the comic book that portrays him) seems to be helping a family save their house from foreclosure.

While packing up to leave their soon to be foreclosed on home, they found a copy of Action Comics No. 1. This comic book was the first time Superman appeared in print. The comic book is scheduled to be auctioned off on August 27th. The foreclosing bank agreed to halt the auction of the home until after the auction of the comic book. Experts agree that it could bring enough money to save the house.

While I am not a real believer in luck, here’s a time where luck played out. SO…how many of you are getting up now to look in your basements and attics for something that may be of value?!

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Matt’s Take on the News

August 17th 2010

SOME BANKERS ACTUALLY DO HAVE HEARTS!!

Marcus Garner from the Atlanta Journal-Constitution brings us an article that puts a few check marks in the bankers column. After Jamaal Anderson was killed in combat in Iraq, his mother (who lived with Jamaal and his son) fell behind in payments. The condo was supposed to be auctioned off last week, but attorneys for SunTrust (the foreclosing lender) stepped in and granted an indefinite reprieve to the foreclosure proceedings.

My hat is off to SunTrust for stepping out of the proverbial box to actually do some good for the family of a fallen soldier. It would be nice if they helped others in need as well.

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Matt’s Take on the News

August 17th 2010

Homes will sell if priced right; foreclosures have impact

Stephanie Armour from USA Today brings us an article that highlights what I have been preaching for years…..Homes will sell if they are priced correctly! In this market where , in most areas throughout the country, the only way to price an over leveraged property correctly is via a short sale. You realtors out there that are not working with sellers are at an extreme disadvantage.

You are forced to chase the market down until you eventually secure an offer (that is assuming that you secure an offer prior to foreclosure). You then package that offer and send it to the bank, all along hoping and praying that the offer is accepted before the buyer pulls up stakes and rescinds there offer (c’mon…you know you have been there and done that many times over!) Buyers have soo many options to choose from, they don’t have to wait for you to get their offer approved. Guess what? When that retail buyer decides to disappear, you have to spend the time and money to secure another offer and start the fun filled process over again. You are wasting time and you are driving the property closer to foreclosure

Why not work with a buyer that discloses everything to everybody AND has an offer that will be presented to the bank and fully negotiate it? You avoid having to chase the market down and manage retail buyers that come and go. It would take a book to really discuss this value proposition. If you want to learn more, call or email me.

Always remember that I house will sell if it is priced correctly.

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Matt’s Take on the News

August 12th 2010

Bank reform brings mortgage aid for the unemployed

Amy Hoak from Market Watch reports on a new program that is designed to help the unemployed avoid foreclosure. $1B has been earmarked to help homeowners make payments after they have lost their jobs. Ms. Hoak reports, “The loss or reduction of income was the primary reason that 58% of homeowners in the National Foreclosure Mitigation Counseling program were facing foreclosure, according to a recent NeighborWorks report.”

“In this economy, getting that next job hasn’t been a very quick thing,” said Julia Gordon, senior policy counsel for the Center for Responsible Lending. For many, a three-month forbearance period isn’t enough, she said.

“For the most part, these are people whose loans are sound, 30-year fixed-rate loans. The person is in a bad situation because they’re underwater in terms of equity and they can’t make payments. They can’t borrow against their house and in many cases can’t sell their house,” Gordon said of the new group of homeowners who could be helped. “We don’t know how many people are paid for with a billion dollars, but it is a great start.”

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Matt’s Take on the News

August 10th, 2010

Habitat for Humanity volunteers breathe new life into foreclosed homes

Tom Perkins from AnnArbor.com brings us a great story regarding an effective use of foreclosed homes. Habitat for Humanity is giving many deserving families the gift of home ownership. They are taking foreclosed homes and renovating them after which time they are placing deserving families in them. Habitat purchases the foreclosed properties and then uses volunteer workers to rehabilitate the homes.

The program isn’t free to the new owners. Each adult who lives in a Habitat house must volunteer a minimum of 300 hours of their time in renovating their house or another Habitat house. They must also make payments on zero percent interest loans. They must also pay taxes and insurance for the home.

Why don’t we see this program in all of our cities?

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Matt’s Take on the News

August 5th, 2010

Coppell Mayor bought clothes, groceries with city-issued credit card

Brandon Formby and Erinn Connor bring us a very sad story from the State of Texas. The mayor of an affluent town decided to take the life of her 19 year daughter and then take her own life. According to the article, a contributing factor may have been their financial despair and the imminent loss of their house to foreclosure. The death of these two people surprised many that were around them.

You may be thinking, “Matt…What does this have to do with real-estate?” The answer is nothing…directly….but lots indirectly.

The vast majority of people (if not all?) that are reading this have either gone through foreclosure/short sale/loan mod, are going through it now or know someone that has/is. This can be a very harrowing time for the people that are going through what can be a very tumultuous time in their lives. Always keep your eyes and ears open to the warning signs. Always offer to find people professional help if they are on the brink. Always be understanding of the plight of those around you.

If you are reading this and you are thinking about suicide, think about the effect it will have on those that are around you. Also know that life isn’t that bad! If you think it is bad…guess what….it can only get better!

As quoted from the web:

“If you are feeling desperate, alone or hopeless? Call the National Suicide Prevention Lifeline at 1-800-273-TALK (8255), a free, 24-hour hotline available to anyone in suicidal crisis or emotional distress. Your call will be routed to the nearest crisis center to you.

Call for yourself or someone you care about
Free and confidential
A network of more than 140 crisis centers nationwide
Available 24/7”

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Matt’s Take on the News

8/3/2010

Homeowners Associations: The New Foreclosure

Diana Olick from CNBC brings us a very timely article regarding Home Owners Associations (HOA’s) foreclosing due to delinquent fees. While I will never give foreclosure advice to a homeowner (I leave that to the lawyers) I do add my opinions when asked. Homeowners do ask about staying current on their homeowners dues. I always suggest that they do. In most states HOAs have the ability to recover a set amount of HOA fees from the new owner (whether that’s the current owners bank at foreclosure or the new owner). In addition to this, they have the ability to foreclose on the property, take the title and then rent the property out until the senior lien holders sort things out with them. Because of this, HOA’s are foreclosing at an alarming rate.

Last week I visited an enclave of very nice waterfront homes. I met with the listing agent of a property that was in preforeclosure. He/she was also the President of the HOA (figure that one out). As the President of the HOA, they have been pushing to foreclose on the properties that are late on their HOA dues. They want to foreclose so they can put a renter into the property which will allow them to recover what they haven’t been paid in the form of dues from the previous owner.

While I am not an attorney, I disagree with one part of the article. I don’t believe they have the ability to resell the property without paying off senior lien holders. None the less, you need to be aware of this fact when dealing with sellers with HOA’s. It can be a nasty surprise!

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Matt’s Take on the News

7/29/2010

Foreclosure Friday – The Top 1% Stick It To The Banks

John Nyardi from the Wall Street Journal reports on a topic that I have been addressing for awhile. As time goes on, a higher percentage of people with $1M and up mortgages are defaulting as compared to their median priced brethren. Mr. Nyaradi points out that, “One in seven homeowners with (a) loan over $1M are in default. That compares to 1 in 12 loans below the $1M mark. This is putting a huge amount of stress on the financial system as 23% of all luxury homes bought as investments are now 90 days or more overdue compared to just 9% of the smaller homes.”

There could be several reasons for this trend. Some folks that are defaulting on $1M+ mortgages, are doing so on second and third homes. If they lose these homes, they still have other(s) to move to and live in. Typically, if an individual with a median price home defaults, they are defaulting on primaries and have no other place to do. So they do there best to hang in there. The other side of the coin is that those that have $1M+ mortgages, have the means to continue throwing good money after bad so they do so until it runs out. Guess what? The money is running out!