Posted by Michael Hughes March 10, 2010
Washington perpetuates the Short Sale into a Foreclosure problem with their half baked programs to fix problems that took years to create.
Here is the analysis by the NY Times:
The problem is highlighted by a routine case in Phoenix. Chris Paul, a real estate agent, has a house he is trying to sell on behalf of its owner, who owes $150,000. Mr. Paul has an offer for $48,000, but the bank holding the mortgage says it wants at least $90,000. (known as a short sale) because the bank will not accept the offer the frustrated owner is now contemplating foreclosure.
To bring the various parties to the table — the homeowner, the lender that services the loan, the investor that owns the loan, the bank that owns the second mortgage on the property — the government intends to spread its cash around.
Under the new program, the servicing bank, as with all modifications, will get $1,000. Another $1,000 can go toward a second loan, if there is one. And for the first time the government would give money to the distressed homeowners themselves. They will get $1,500 in “relocation assistance.”
This is not incentive enough for a bank to have a decisive moment. It makes no sense. The reality is that Washington has not been able to create a program to fix the problem. It’s not working. The reality of the housing market is far from Washington bureaucrats.
If you have questions regarding this article or are thinking you will Buy A Home In Boulder please call me 303-359-6627 or e-mail Michael Hughes at Fuller Sotheby’s International Realty in Boulder, CO