Steve Dawson

I know you have heard it before. But this time it is a must. The REO's are coming. I just spoke with a top exec. at B of A, and they are drowning. We have been told twice this year that the REO's will be dumped onto the market, and twice we have had moratoriums, keeping them under wraps.

One of the reasons was because the government wanted to see if the loan modifications would work, which they did not. A lot of the homeowners who did loan mods are back into default. So, in order to fix this problem, the banks need to unload their assets and deal with the consequences.

The number is not clear, but it is around 90,000 reo's in california alone that the banks are holding onto, and trying to keep under wraps. But come September of 2009, the moratorium is over and we will be flodded.

What this means is the market price will take another dive, one more time. Supply and demand will bring the prices down and a huge rate. Then, after a few years, we will recover and slowly climb our way back up.

Not only is this troubling to hear for most homeowners, but here is more potentially bad news. This exec. mentioned that it would not be out of the question for the interest rates to rise into double digits. If you think about it, that could be very harmful. We would have a large supply of bank owned properties, short sales and a few regular sales, and no buyers buying them because the rates are so high, no one can afford the payment.

Time will tell. We are not out of the woods yet.

Democrats have wasted no time in creating a new bill to change bankruptcy rules with the aim of reducing home foreclosures. Under the proposal, judges could order lenders to forgive some mortgage debt.

The measure would change the law to give homeowners filing for bankruptcy the opportunity to restructure their loans so that they can save their homes from foreclosure.

"The economic turmoil we are experiencing is a direct result of the burst housing bubble," said House Judiciary Committee Chairman John Conyers, D-Mich., who co-sponsored the bill in the House. "Foreclosure is now expected to claim more than 8 million homes by 2012 -- 16% of all mortgages in America. To set our economy on the path to recovery, we need to strengthen our communities by taking steps to stabilize the home mortgage market. Giving homeowners the chance to restructure their loans will help more families avoid foreclosure."

Lawmakers who introduced the Bankruptcy Act of 2009 argue that the effect of the anticipated stimulus package will be greatly diminished unless foreclosures can be reduced. They say it would help break the continuing cycle of foreclosure that threatens neighborhoods and cities across the country.

Rep. Linda Sanchez, said that under the current bankruptcy law, judges can restructure debt on vacation homes, yachts and private jets, but not on primary homes. "There is no reason why average Americans should not have the same legal protection to save their family homes."

Rep. Jerrold Nadler, said that under current law, home mortgages are virtually the only debts that cannot be modified in bankruptcy. The proposal, would give homeowners the same advantages corporations have when trying to restructure their debt. Voluntary efforts to modify loans have not produced the desired results.

This is a plea for our environment. President Bush is trying to destroy one of the few places we have to enjoy our beautiful nature. Bush's plan is to auction off hundreds of thousands of acres of land near national parks. A week from today, he wants to lease 276,000 acres of pristine land. Areas such as Arch's national monument, Dinosaur national park, Canyon Lands national park, to name a few.

Bush is planning a midnight regulation which would do the following:

1) Weaken rules on drinking water, allowing higher arsenic levels.

2) Allow coal companies to dump into streams.

3) Oil and Gas leases next to national parks.

4) Concealed weapons in national parks.

5) Uranium mining near Grand Canyon.

6) More snowmobiles at Yellowstone.

These iconic places, gifts for the entire world are being threatened by one man, for a short gain. This plan is definitely aimed at helping the big oil companies, which Bush is a big part of. And it would destroy these grand places permanently for a quick buck in the already rich pockets of the oil companies.

But there is something we can do to stop this. Please. You have exactly one week to contact your leaders, representatives, congressmen, and the White House, and tell them not to allow this. Do not permanently harm this great countries monuments for temporary gain.

If you haven't heard, there has been talk about the treasury dept. lowering the interest to 4.5%. However, what you might not know is that the National Association of Realtors (NAR) was in secret talks with the treasury about how this would affect the economy. The proposal would be something like this:

"A buyer would qualify for a traditional loan (from Wells or others) and then the government would buy the loan down to 4.5%. The government would get the money by issuing bonds at 3% thereby making a 1.5% profit on the buy-down. This program could only last six months or could go up to 18 months."

Well, The bad news is that there was a significant leak regarding these discussions as a story appeared in the Wall Street Journal, New York Times, and the Washington Post yesterday morning. NAR claims no responsibility in the matter and apparently treasury is not extremely happy! The net of this leak is that buyers potentially may sit on their hands until this buy-down takes place!

I believe this proposal is in the best interest of the industry and real estate practitioners. Please galvanize your offices and agents to email congress and our senators to approve this buy-down. There is perhaps a 50% chance that there will be an announcement on the weekend for this program. This lobbying needs to take place over the next week! Please contact government officials to express your approval of this type of buy-down.

A sample letter would look like this:

I support the proposal to have the government lower interest rates to 4.5% for the purchase of homes. This proposal, in its current state, could potentially change the picture for the entire real estate industry and therefore the entire economy.

I believe this proposal is in the best interest of the industry and the country as a whole.

Best regards,

Name

In addition to sending correspondence to your senator, please also send it to your local congressperson. Click on the link below, add your address, and you will see the link for your local congressperson.

http://www.visi.com/juan/congress/

If you are considering selling your home or purchasing real estate in Contra Costa, you owe it to yourself to contact Steve Dawson for all your real estate needs in the East Bay.

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