Prosper, TX: What the foreclosure freeze may mean for you

In my humble opinion, the foreclosure freeze has been a long-time coming. The foreclosures and short sales have been handled in such a way that (again, in my opinion), there isn't a big bank out there that should pat themselves on the back for the handling of these properties.

As a home seller in Prosper, TX - what does the foreclosure freeze mean to you?

1. Those foreclosure properties are currently 'off the market'. This creates opportunity for you. Qualified buyers in our area look at foreclosures, but I've found them buy normal resale homes or new construction in higher numbers. Some of your competition went away temporarily. Supply and demand basic rules imply that we should see some positive outcomes for the homes where there is no lender involvement in the sale.

2. The media attention is causing a bit of a stall in home showings this month. Bad news sells papers. Consumer confidence was low already. It's going to take people a moment to shake off all that fear and move on with their lives. Buyers are very savvy. They are taking in information from a variety of sources and then making up their own minds.

3. There are even more opportunities for residential leasing. When people hesitate on purchasing a home, or they can't get that foreclosure property yet that they thought they were about to close on, they will turn to temporary living solutions. This is an opportunity that homeowners have to get a qualified tenant for a 6-month to 24-month period. This moratorium on foreclosure sales is not going to last. Real estate is a cyclical industry. Freezing billions of dollars in home inventory is a big wake-up call and the banks are finally going to get off their duffs and pay attention to their broken processes.

4. Also on the leasing of residential homes, sellers are going to have to decide if they are on board with the idea of leasing out their home. Tenants are just as afraid that homeowners won't make their mortgage payment as landlords fear tenants won't pay the rent. If you can get beyond the fear, and get tenants and landlords vetted to everyone's satisfaction, I can point to dozens of happy clients who are currently leasing their homes to good tenants. Some of these tenants may actually become that landlord's buyer when the lease is over. Some are just waiting for their current home to sell so that they can buy in Prosper.

5. The eventual return of some of the foreclosure inventory to the market. These folks were behind in their mortgage. As each file is reviewed more closely, and banks decide what will be done with these homes (or someone decides for them), some of those homes will filter back out for final sale. Many could be mitigated, which means the banks may work with the owners and re-establish their ownership rights if they qualify to stay and can reach an agreement about what to do with the back-payments.

I helped one family in Royse City, TX last year who was already four payments behind to a large bank. We rented out their home (it took one day to get a tenant), and they began repaying back their payments to the bank with the extra $600 above their house payment that they received in rent. That tenant renewed their lease this year and both tenant and landlord are happy with the arrangement. The bank is also happy, and all threats of foreclosure are off the table. People working with people got this problem solved. Unfortunately, many people fall behind on their mortgage and just sneak out in the middle of the night and abandon the property. There are other options if we can get in front of people to discuss those options.

I hope you have a blessed day!

Ronda