As I thought about today's blog, I looked for something positive to write about in the real estate world. I didn't find anything. There were a few sensational items about the developer's default of a $41M loan on the Glen. I also found an article about the highest price foreclosure in the Chicagoland area. For those who are interested it's a $16M loan default on a 400 plus acre horse farm in the Barrington area.
These items and many more like them, paint a bleak portrait of the real estate landscape. All the news is bad: the large amount on some defaulted loans make individual foreclosures appear insignificant. The sheer volume of failed developments including many in our own area take away our ability to feel for the individual homeowners who are facing foreclosure. If you are looking to buy some property now, this type of news makes it easier to take on a "shark" mentality. It allows us to view all property for sale as distressed. Low balls offers are the norm, if you are lucky to receive one at all.
But the truth is that not all the news is bad. Bravo to the NAR for attempting to provide the media with another perspective on the housing market. Although, we can argue that this is self-serving, so what? If there is some good news on the horizon, or positive trends, then let the NAR say it. After all, they certainly contributed to the slump that we are in, with their convincing arguments that "your home is your piggybank", "real estate will continue to rise" and other messages that persuaded people to buy homes that they couldn't afford. I'm all for letting them lead us out of this current mindset.
Tomorrow: not all homes for sale are distressed!
Summer is creeping it ways towards us. Are you ready?
Thursday, June 18, 2009
Monday, June 8, 2009
NAR holds first ever summit
The NAR (National Association of Realtors) held their first summit in Washington DC for the purposes of sharing ideas, advocating for certain legislation that will help the housing situation and help the news media get "additional insight". Sounds like they would like to have a hand in spinning the "news".
Here is a summary of some of the more notable items coming out of this summit, which include the current president of the NAR, Charles McMillan, Robert Reich, former U.S. Secretary of Labor, Pat Buchanan, Harold Ford Jr (D-Tenn) and others.
There are currently twenty (20) million homes under water....from being behind on mortgage payments to foreclosure. This is 1 in 5 homes in the US. The "reforeclosure" rate is over 50%. Reforeclosures occur when there is refinancing allowed on a property so as to avoid foreclosure.
This problem has been aggravated by stricter requirements on small mortgage banks. The larger banks, such as Wells Fargo and Bank of America have raised the net worth requirements of these smaller mortgage bank/brokers. This makes it extremely difficult for the smaller entities to obtain capital, and lend money. This is a classic "Catch 22" situation.
The smaller financial institutions who had traditionally provided mortgages for home owners, have seen their net worth diminish through foreclosures and the declining value in the homes they have financed. With the increase in capital requirements from the larger banks, these smaller entities are unable to help their clients who are behind in their payments because they are unable to obtain more cash to help with refinancing.
Bank of America and Wells Fargo have received TARP money. Should we as taxpayers provide money to bail out these institutions, who then institute regulations that not only don't provide assistance to us, but have the potential to cause even more homeowners to face foreclosure? What do you think?
Here is a summary of some of the more notable items coming out of this summit, which include the current president of the NAR, Charles McMillan, Robert Reich, former U.S. Secretary of Labor, Pat Buchanan, Harold Ford Jr (D-Tenn) and others.
There are currently twenty (20) million homes under water....from being behind on mortgage payments to foreclosure. This is 1 in 5 homes in the US. The "reforeclosure" rate is over 50%. Reforeclosures occur when there is refinancing allowed on a property so as to avoid foreclosure.
This problem has been aggravated by stricter requirements on small mortgage banks. The larger banks, such as Wells Fargo and Bank of America have raised the net worth requirements of these smaller mortgage bank/brokers. This makes it extremely difficult for the smaller entities to obtain capital, and lend money. This is a classic "Catch 22" situation.
The smaller financial institutions who had traditionally provided mortgages for home owners, have seen their net worth diminish through foreclosures and the declining value in the homes they have financed. With the increase in capital requirements from the larger banks, these smaller entities are unable to help their clients who are behind in their payments because they are unable to obtain more cash to help with refinancing.
Bank of America and Wells Fargo have received TARP money. Should we as taxpayers provide money to bail out these institutions, who then institute regulations that not only don't provide assistance to us, but have the potential to cause even more homeowners to face foreclosure? What do you think?
Subscribe to:
Posts (Atom)
