Foreclosures

I hope with this blog to provide a little food for thought, not a group of solutions. As much as most of us enjoy watching magicians dazzle us with their dexterity and their skill at misdirection, watching politicians and others of similar persuasion is almost as much fun, but a lot tougher on the audience if you miss how the trick is done. Our governator recently showed up on TV with a group of like minded folk having a meeting to discuss what could be done to protect the consumer from the threat of foreclosure. That's what they said anyway. Keeping in mind that there are two parties to a foreclosure, the lender and the borrower, and the borrower probably owes more than the home is worth. The lender on the other hand has a significant dollar investment, and if foreclosed upon the collateral is going to devalue farther and produce a whopping loss. The borrower is probably not a significant campaign contributor, the lenders probably are. It seems to follow that what was said and what was intended are not the same thing. Countrywide, rapidly becoming notorious, GMAC, and other lenders are apparently offering program modifications to keep payments at current levels rather than resetting to the higher levels contracted for originally. This is characterized as a socially and ethically good thing to do for the benefit of the borrower. Since social and ethical motivation has been absent until now, the reasoning is suspect at least. The lenders are faced with situations which are going to cause them to lose either a lot of money, or a lot more money, and keeping some income stream is preferable to causing a substantial outflow, or asset reduction. Having suggested that these parties are lying in their teeth about the motivation for their actions, there remains the valid argument that the greater social and economic purpose will be served by preventing as many of these foreclosures as possible. The repercussions of foreclosures on other properties in the vicinity, either near as in the same block, or even in the same community, would be great and even potentially devastating, and these repercussions would afflict people who were not in any way culpable in creating the problem. Clearly we have some issues to resolve and some strategies for resolution are urgently called for. Just as clearly, the issues need to be identified for what they are and dealt with reasonably, not with the dexterity of a magician but the thoughtfulness of a statesman. There is blame aplenty to be shared, and the pointing out of errors could make for some good historical reference, but for now, solutions requiring some intelligent thought and action should be the order of the day. This is not Philosophy 101 where we may discover some universal truth susceptible of proof from any direction. We need some expedient resolution, and soon.
For anyone facing the possibility of default on a mortgage I urge you to get educated as to the process and the timeline. There are links on our site to Title companies that can provide you some information in that respect, and possibly some description of short sales and other remedial possibilities. If that doesn't work call our office,and we'll get some information to you.
The next blog is going to talk about short sales and the real estate agents' role as we see it. We encourage you to first consult an attorney. Not a consultant, not a real estate agent, not your uncle Willie who once had a car repossessed, a real estate attorney. One national study predicts 20% of sub-prime loans in Chico will go into foreclosure. That's one in five, and we need to get ahead of that curve if possible.
As usual,
Thanks for visiting.