Tere Rice

TRUTH IN LENDING

This country is quickly spiraling out of RE economic control. Here is the scenario. House #1 goes into Foreclosure because an ARM and value drops. Bank forecloses and lists the house on the MLS for 55% of the original loan. Now this is where the domino effect starts. Now the neighbors see this house which is comparable square footage lot size etc, to their home. So why should they continue paying on a mortgage that is higher than the property value? Even though they can make the payments the lender will not do a loan modification comparable to the current value. So they walk. And so on and so forth thru out the neighborhood, then the city, then the county, then the state and now the whole country. This is what is happening here locally and I would imagine ac-cross the country.

Where will it stop? Why would anyone even buy knowing the market is still dropping? There is a solution and the lenders should have a plan to correct this. Instead they have received billions of tax payer dollars with no plan to stop the hemorrhaging. We need a plan. For very owner that walks, we lose! First their credit is ruined so less money will be going into the economy and since there is no debtors prison, why shouldn't they walk?

Lenders have got to catch up and face the reality they made a fortune in loans from 2003-2006. Now it is time to pay the piper for giving loans to those that are now unable to repay them, whether because they are sub prime, adjustable, interest only, or mostly because the value of the home has dropped below the loan amount. The only way to stop the Free Fall is to renegotiate these loans in trouble and I don't mean just the ones people are behind, and take the loss up front!! It seems the lenders are still playing by the 1989 Foreclosure market rules. That will not cut it today.

It is costing people and businesses not only their homes and income but has put a great burden on every citizen in the United States. Our Economy is faltering. The deep pockets have holes in them. I for one is MAD AS HELL AND SICK AND TIRED!!

What to do? If you or your clients are in this situation call the lenders and be TENACIOUS. We are no longer Realtors we are loan modification specialists and it is up to us to stop the downward spiral. As a group we are strong! As much as our goal has been sell sell sell we need to stop and take note!!

Today's market is a learning experience, everyday the rules change. Just when I think I have it figured out something new drops in. We are rewriting the Real Estate game. Everything from marketing to negotiating a deal. For those out there that think Realtors make easy money, you don't know how stressful and difficult it really is. My satisfaction comes from truly helping people in this trying time.

It is not as it was a few years ago when people "wham bam" made an offer and closed in 30 days or less. The agents and brokers out there today are surviving because they have adapted to what it takes in today's market place. When they talk listen don't think because you heard or read it in the newspaper you know better. The media and real estate reality are not even in the same room. You can not buy a clean turn key ready house in Temecula for $100,000. Not gonna happen. I actually had a guy come to one of my Open Houses and tell me that's what he was looking for because he heard on the news prices were dropping and banks are desperate.

The amount of home sales here have actually risen since last year. If you moved out of Calif in 2003-2005 you can come back the market is comparable to 2002 housing prices. Those that didn't buy during the frenzy can now qualify for a home loan. Flippers are morphing into responsible home owners with rental properties. No more over night get rich quick.The Calif RE market is gold so come get ya some!

Banks are beginning to see the best they can do is close the Short Sale and accept the loss. If they don't we have an even greater number of REO's dumped on the already saturated market place which is driving prices even lower. The biggest problem is when asset managers hire their favorite BPO agent to come in and do a BPO in an area they are not familiar with. The lender then sets an unreal price that won't be competitive in the current market. Further slowing down the sale.

I have heard Countrywide is hiring more negotiators to help with the overload of NOD's. But are they educating them? What are their back grounds? I know it's a number's game and nobody wants to take a loss. But how can they make rational decisions faster? The longer it takes to negotiate a Short Sale the more the market drops. What makes the most $ense closing a Short Sale in 30-45 days or going the Trust Deed Sale route and taking 6 months or more to get it back on the market to sell?

I don't think it's 100% the borrower's fault, lender's need to take some responsibility as well. Any time you give money for nothing there is going to be a back lash. And that backlash is the market right now over saturated. I personally didn't participate in the housing frenzy but allot of Realtors in my area did and have lost their own homes. I go to sleep with a clear conscious. I make my payments. And I help those that did get caught up. I find it very sad and it really hurts my heart.

I am working on a Short Sale with a seller who got in way to deep and pretty much is losing everything, including his dignity. I think most would have written him off, but I keep trudging ahead. In the prelim title report it turns out he has 4 liens and a tax penalty assessment. I have negotiated with the two banks and two attorney's and have agreed to pay them out of my commission at the close of escrow. My buyers are wonderful people and after showing them 30 plus homes they really want this ONE! So on we go trying to just get to escrow and hopefully a happy ending for all.

After 45 days of bi-weekly phone calls to CW then being assigned a negotiator and now three weeks of shaving down the HUD 1 and my commission to 3% total, I have both sides. I find the seller had a pending law suit for a loan gone bad. This resulted in a lien being put on the house. This last week was negotiating with the attorney to remove the lien during escrow. I will pay the lawyer $3000 at the close of escrow the buyer has offered to split this with me. Great People!! So next week or what there is of it I will have to resubmit a HUD 1, (I think this is the 5th or 6th HUD1) thank you Fidelity Title and Escrow. Whether or not CW will approve money$ going some where other than their pocket, I don't know. But I will submit. My buyers are great people and truly want this house. I have shown them probably 35-40 homes, before we began the long hard road of this Short Sale trek. So I will forge ahead in hopes of being able to hand them the keys. This is not my first time to the Rodeo. Nor will it be my last. I have another S/S going down, I have just the buyers. And I just listed another two weeks ago. And am hopeful to get an offer to proceed. I just got it out of the Bankruptcy dept. at CW. Short Sale's can be beneficial for both buyers and seller's, and even the lender's. It slows down the large numbers of REO's coming on the market and dropping home value's. It save's the Lender's money and time. I wish they would gear up for this onslaught of pre-foreclosures. I am hesitant to involve my Buyer's in Short Sales that the agent isn't knowledgeable and PATIENT handling SS. Since this may well be the status quo for the next year or two, I am digging my heels in and and holding on with both hands. Yes Virginia there really is a Short Sale negotiator, I just don't know when escrow will close.......... the saga continues.