Jimmy Stewart

I found this fascinating quote today:Image via Wikipedia

Zillow COO Spenser Rascoff, in an appearance on Fox Business expects a new wave of foreclosures in 2010. Some of the points he made include:jimmystewart.typepad.com, Jimmy Stewart - San Antonio REALTOR, Nov 2009

You should read the whole article.

If now is not the time to buy a home, then when will it be time? The last time I remember home prices falling this dramatically was around 1990 with the S&L debacle. If you bought a home then you've done well in terms of equity.

So, is it different this time? Is the slide in home prices almost over? Will home prices be higher in 10 years than they are now? Will interest rates increase over the next few years?

I don't have a crystal ball, so I'm not going to make any predictions. But, I do know that as a stock market investor for many years, bear markets are followed by bull markets which are followed by bear markets again. The cycle repeats itself over and over. Right now, all of us are experiencing a real estate bear market. What's next? When will the real estate bull return? Will the cycle repeat?

Look at the news! Could it get any worse? Headlines tell us that unemployment will increase, foreclosures next year will be higher than this year, a double dip recession is coming, and on and on and on.

Who wants to own real estate? Me, that's who! The last time I checked the world can only end once. And despite all the 2012 hype, that's not one of my predictions.

So what's a homebuyer to do? Buy, buy, buy before all these bargain basement prices go bye, bye. Will you be able to buy a house in 2010 and flip it for a profit? I don't know. But, I'm going to go out on a limb and say that 5 to 7 years from now you'll feel good about your decision to buy.

I sleep well at night knowing that my recommendation to buy a home today will work out real well over the next few years.

What do you think?

A Minnesota court answered the question: Do Homeowners Have a Right to a Loan Modification? And the answer is...no!

A lawsuit brought by Minnesota homeowners asserted that homeowners had a right to a loan modification. U.S. District Court Judge Ann Montgomery disagreed, stating that loan modifications were not an entitlement.

No kidding!! Can you imagine the multi-year lender backlog that would occur if all homeowners had the unilateral right to modify a contract? Did the plaintiffs to the lawsuit envision a world where lenders could modify a loan to their benefit any time they pleased.

Sometimes I just can't believe the kind of lawsuits that come before the courts.

Do loan modifications work? That question was not answered by the Treasury Department today in a news release announcing the growth of loan mods. The Treasury said there are now about 650,000 borrowers in the loan modification program, or 20% of eligible borrowers. That figure is up from 16% participation in September.

What percentage of loan mod participants have missed a payment? The Treasury doesn't answer that question. Anecdotal reports suggest default rates at about 50%.

Are loan mod programs with high default rates better than immediate foreclosure for housing prices and lenders? My answer is yes because it keeps many people in their homes and alleviates some pressure on housing prices in hard hit markets. Some argue that we're just postponing our problems.

What's your opinion?

Fannie Mae just announced the Deed For Lease program that will allow qualified homeowners to take a Deed In Lieu of foreclosure and lease back their home for up to one year. Homeowners must qualify in terms of income and any additional liens must be released.

The Deed For Lease program offers homeowners another option to avoid foreclosure when loan modification or forbearance won't work. But, what will the homeowner do if there are additional liens on their property and the lien holders will not agree to release the liens? There's always foreclosure or bankruptcy, but those options may carry heavy credit burdens for the homeowner in the future.

The distressed homeowner in default on more than one lien still needs the option of the short sale to avoid foreclosure. The short sale is an excellent way for the homeowner to get financial relief without the cloud of foreclosure on their credit.