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| Realty Investment Group |
In The News:
RECENT BAIL OUT INFO
Does the housing bailout bill from our government offer real solutions and help to homeowners? The
answer in the majority of cases is unfortunately NO! The bill does not seem to address many of the
issues that are putting homeowners in financial hardship right now.
Misconception #1---Less than 30% of the home owners who are in financial hardship that we work with
in our national network have "ARM's" or Adjustable Rate Mortgages on their properties. It is a simple fact
that the majority of homeowners who could afford their houses and were not "upside down" on them
refinanced them a long time ago. The vast majority of home owners who do have ARM's could not afford
to keep the property even if it was refinanced!
Misconception #2---Unemployment is skyrocketing right now in the US. The bill does not offer jobs to
home owners who are unemployed. For many home owners, even the option of a lower payment will
not work. Unfortunately our housing bailout bill does not really make much of a difference if you have no
income at all to pay any mortgage payment. Would a moratorium on foreclosures do anything other than
delay the inevitable, potentially costing lenders more money?
Misconception #3---One of the biggest misconceptions we run into, is that many people believe that the
home owners needing help are owner occupants who are trying to save the roofs over their heads. It is
a fact that the vast majority of home owners who have defaulting loans or properties they are faced with
loosing are actually investors, or the property is not their primary residence. Investors have made up a
very high percentage of home sales during the housing boom years. Unfortunately most of the
solutions in the housing bailout plan only help owner occupant home owners, NOT investors!
Misconception #4---Many Americans also have been stuck with the problems of relocation over the last
few years. These home owners were happy to accept a higher paying job and even purchase another
home in a different area of the country, only to be stuck with a home in their previous city that would not
sell. After being stuck with these properties, and not able to play the role of property manager
(especially when showing a loss), these home owners were also left with few options. Unfortunately
there are no real solutions that address this either.
Then we are left with all of the Americans who just simply could not afford the home even if the lender
were to reduce the loan amount and payment, or who are fed up with home ownership in general! As
some of the country is waiting for the housing bail out from our government, many home owners see no
solution in sight!
****To these home owners mentioned above, a short sale may be the best alternative****
Taken From Recent Article In The Atlanta Journal-Constitution
HOME RESCUE BUILDS UP HOPE
$275 billion foreclosure plan encourages many, but some fear incentives to lenders are too small.
Others say it won't help people hit hardest.
Date: February 22, 2009
Publication: Atlanta Journal-Constitution
Maybe this time government intervention will really work. That's what metro Atlantans involved in real
estate are hoping after President Barack Obama last week announced a plan to help millions of
homeowners at risk of foreclosure.
The consensus appears to be that the $275 billion package could succeed by encouraging lenders to
rework millions of high-cost mortgages nationally and by keeping interest rates low to encourage
people to buy homes or refinance their current mortgage.
Under Obama's plan, lenders who don’t want to modify loans will receive incentives for choosing an
alternative to foreclosure, such as a short sale. In a short sale, a lender allows a home to be sold for
less than what’s owed on the loan if it determines that loss will be less than a foreclosure loss. A seller’
s credit rating does not suffer in a short sale like it does in a foreclosure.
Tonya Willis, who works for a bank, said she opted for such a short sale rather than going through
foreclosure, but it took six months to get the bank to agree to the deal. Willis had bought a foreclosed
house in College Park two years ago for $123,249, but she defaulted when her mortgage payments kept
climbing and she felt unsafe in the neighborhood. The house is now listed for $83,000. Willis’ real
estate agent, Dionne Stokes-Hicks of Keller Williams, hopes the new government incentives will speed
up short sales and make them more common to help unlock the depressed housing market.
David Ellis, executive vice president of the Greater Atlanta Home Builders Association, said he’s
encouraged by the one-two combination of the foreclosure prevention plan and an $8,000 tax credit for
first-time home buyers- which was included in the $787 billion federal stimulus program that Obama
signed last week. “I think that anything that begins to curb the foreclosure process… is a positive thing.
As to whether it works is anybody’s guess,” he said. “It certainly sounds to me like a good start.”
Links:
President Obama's Homeowner Affordability and Stability Plan (Bailout Outline)
RECENT BAIL OUT INFO
Does the housing bailout bill from our government offer real solutions and help to homeowners? The
answer in the majority of cases is unfortunately NO! The bill does not seem to address many of the
issues that are putting homeowners in financial hardship right now.
Misconception #1---Less than 30% of the home owners who are in financial hardship that we work with
in our national network have "ARM's" or Adjustable Rate Mortgages on their properties. It is a simple fact
that the majority of homeowners who could afford their houses and were not "upside down" on them
refinanced them a long time ago. The vast majority of home owners who do have ARM's could not afford
to keep the property even if it was refinanced!
Misconception #2---Unemployment is skyrocketing right now in the US. The bill does not offer jobs to
home owners who are unemployed. For many home owners, even the option of a lower payment will
not work. Unfortunately our housing bailout bill does not really make much of a difference if you have no
income at all to pay any mortgage payment. Would a moratorium on foreclosures do anything other than
delay the inevitable, potentially costing lenders more money?
Misconception #3---One of the biggest misconceptions we run into, is that many people believe that the
home owners needing help are owner occupants who are trying to save the roofs over their heads. It is
a fact that the vast majority of home owners who have defaulting loans or properties they are faced with
loosing are actually investors, or the property is not their primary residence. Investors have made up a
very high percentage of home sales during the housing boom years. Unfortunately most of the
solutions in the housing bailout plan only help owner occupant home owners, NOT investors!
Misconception #4---Many Americans also have been stuck with the problems of relocation over the last
few years. These home owners were happy to accept a higher paying job and even purchase another
home in a different area of the country, only to be stuck with a home in their previous city that would not
sell. After being stuck with these properties, and not able to play the role of property manager
(especially when showing a loss), these home owners were also left with few options. Unfortunately
there are no real solutions that address this either.
Then we are left with all of the Americans who just simply could not afford the home even if the lender
were to reduce the loan amount and payment, or who are fed up with home ownership in general! As
some of the country is waiting for the housing bail out from our government, many home owners see no
solution in sight!
****To these home owners mentioned above, a short sale may be the best alternative****
Taken From Recent Article In The Atlanta Journal-Constitution
HOME RESCUE BUILDS UP HOPE
$275 billion foreclosure plan encourages many, but some fear incentives to lenders are too small.
Others say it won't help people hit hardest.
Date: February 22, 2009
Publication: Atlanta Journal-Constitution
Maybe this time government intervention will really work. That's what metro Atlantans involved in real
estate are hoping after President Barack Obama last week announced a plan to help millions of
homeowners at risk of foreclosure.
The consensus appears to be that the $275 billion package could succeed by encouraging lenders to
rework millions of high-cost mortgages nationally and by keeping interest rates low to encourage
people to buy homes or refinance their current mortgage.
Under Obama's plan, lenders who don’t want to modify loans will receive incentives for choosing an
alternative to foreclosure, such as a short sale. In a short sale, a lender allows a home to be sold for
less than what’s owed on the loan if it determines that loss will be less than a foreclosure loss. A seller’
s credit rating does not suffer in a short sale like it does in a foreclosure.
Tonya Willis, who works for a bank, said she opted for such a short sale rather than going through
foreclosure, but it took six months to get the bank to agree to the deal. Willis had bought a foreclosed
house in College Park two years ago for $123,249, but she defaulted when her mortgage payments kept
climbing and she felt unsafe in the neighborhood. The house is now listed for $83,000. Willis’ real
estate agent, Dionne Stokes-Hicks of Keller Williams, hopes the new government incentives will speed
up short sales and make them more common to help unlock the depressed housing market.
David Ellis, executive vice president of the Greater Atlanta Home Builders Association, said he’s
encouraged by the one-two combination of the foreclosure prevention plan and an $8,000 tax credit for
first-time home buyers- which was included in the $787 billion federal stimulus program that Obama
signed last week. “I think that anything that begins to curb the foreclosure process… is a positive thing.
As to whether it works is anybody’s guess,” he said. “It certainly sounds to me like a good start.”
Links:
President Obama's Homeowner Affordability and Stability Plan (Bailout Outline)
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