Solutions for the Subprime Lending Crisis
Solutions for the Subprime Lending Crisis
There are solutions for the subprime lending crisis that entail making changes to the way lenders are handling this crisis. There are distinct groups of individuals that are causing this foreclosure epidemic. First, there is the homeowner who got a “teaser interest rate” that was affordable at the time but became unaffordable when the interest rate adjusted. In addition to the teaser interest rates, lenders started a policy of “no documentation of income” or no-doc loans that did not require borrowers to show proof of their income and are now referred to as “liar’s loans”. The problem was that homeowners couldn’t afford the payment if there were any increases due to taxes, insurance, or an interest rate adjustment.
Next, there are individuals that purposely chose low-interest rate, interest only, and even negative amortization (neg-am) loans with the intent of flipping the property after one or two years and taking a huge capital gain. In the past few years, these “speculators” became trapped, either unable to sell or renting them with negative cash flows. The most viable option for these investors was to give the property back to the lender by foreclosure rather than bleeding monetarily every month.
Another typical foreclosure involved a homeowner cleverly refinancing his property but never making a payment and in effect selling his home to the lender, by taking out his equity on the refinance. There is a lingering question about whether these homeowners had “intent” to defraud the lenders, but that is better left to another discussion. And lastly, there are true personal hardships that resulted in foreclosure. Our estimates are that 95% of these homeowners want to keep their homes but are unable to reinstate the back payments.
Lending institutions can resolve many of these foreclosure issues by:
- Having counselors available to work with the homeowner for a
solution. Possible solutions include loan modification (putting the late payments and costs on the end of their loan, accepting partial payments of the amount due until paid, reducing the interest rate adjustment(s), freezing the interest rate for the term of the loan, getting a deed in lieu of foreclosure in exchange for giving the homeowner a credit for a rental truck when they vacate, accepting partial mortgage payments for a limited time, assistance with applying for and getting government assistance including grants that could reduce the loan, and doing financial planning and credit counseling.
- If the borrower is an investor who can no longer afford the loan, the
lender should get a deed in lieu of foreclosure, or a loan modification that is workable for both the lender and the investor which would be paid when the property was sold or refinanced.
- If a homeowner refinanced and never made a payment, the lender should request a deed in lieu of foreclosure and if the homeowner refuses, the lender should get a judgment after the foreclosure auction and collect this judgment. If fraud is suspected, the case should be pursued by local authorities for prosecution.
- True hardship cases should be handled on an individual basis with the interest of the borrower in mind. Loan modification and any other reasonable offers of help should be used to help resolve the problem. If a solution is impossible, a deed in lieu of foreclosure should be requested with a minimal compensation for moving expenses.
While certain banking regulations preclude some of these solutions Congress
and the Federal Reserve must quickly realize the nature of this crisis and its resemblance to the former Savings and Loan crisis. Immediate action should be taken before it becomes expensive for every taxpayer. To their credit, a number of insightful lenders have already taken steps to have counseling staffs on hand and work with homeowners. Now is the time to take more aggressive action before hundreds of thousands of homeowners find themselves no longer owning a home or even homeless.
Dave Dinkel has over 30 years experience in real estate investing which has given him a unique perspective into the workings of the real estate market. He has developed a CD entitled "How to Sell Your Home in as Little as 72 Hours", available at no cost for a limited time by going to <a href="http://www.fsbotlc.com">www.fsboTLC.com</a> and he shares even more techniques and secrets in his homeowner's home study course at <a href="http://www.fsboautopilot.com">www.FSBOautopilot.com</a>
Things you need to know about Baton Rouge Louisiana real estate Posted By : Garrett5454 Pierson5454
Things you need to know about Baton Rouge Louisiana real estate When you start looking to buy a new house there are always questions on your mind. You are only human and you show that by caring for your family. There is nothing wrong with that, in fact it is what most people do, when you move you want to know how safe you family is going to be, not only in your new house, but also in your new city or neighborhood. So before you make any decision you will speak to your wife or husband about any new places you will look at for your new house. If you have any choice in the matter and your family is not being relocated due to work reasons then you will look long and hard for a new safe place for your family. So this is where the internet comes in, you will search until you find the best and safest place for your family. You will for instance look up Baton Rouge Louisiana real estate and the first thing you will do after that is look for a respectable realtor or homes for sale agent. There is nothing wrong with wanting your family to be safe, so you realtor will understand if you are to ask questions like, is it safe, does it have an alarm system installed, is there a 24 hour patrol, are there burglar bars on the windows and doors, and other safety question like that, which we suggest you do. The safety of ones family is very important and we as parents are obligated to take care of them, and looking at Baton Rouge LA real estate listings is one move that will keep you family safe. If you are not looking to move into a house that another person has already lived in and you just do not have the money or time to build your own home you can ask your realtor about Baton Rouge Louisiana new homes for sale, they are sure to have a few on their lists that you will like, whether you have a large family of 10 or a smaller family of 5 or just two, you are sure to find something to suit your needs.
Clean and De-Clutter Room By Room
There is a certain aspect of home selling that has become ever more important as buyers become more and more choosy about the homes that they view and purchase. Home staging, the process of cleaning and improving the visual impact of a home has become a bit of a rage across the country. Now, more than ever we are seeing home staging services cropping up and doing wonders for the home selling industry. However, home stagers can come at a hefty price. That being said, the service they provide is impressive and does help the home to show better, the question is; can you do it yourself?
Well, there are certain aspects that can easily be done by any home owner. However, there are a few that cannot. What you can do is take care of the initial steps yourself as they are not difficult and only take a bit of time and effort. The first step of this process is always the cleaning and de-cluttering of your home. Cleaning is self-explanatory. Clean your home from top to bottom, every room, every corner, every closet. Surfaces should shine like they never have before. Try to think about your home being featured in a home magazine, how would you want it to look? That is essentially what is going to happen, the only difference being is that your home will be appearing online where it is available to seen by far more than the average readership of any magazine.
Clutter is the number one enemy of good home shows. Buyers do not want to see piles of your stuff lying around. This kind of thing gets in the way of buyers getting a feel for the home. It does help them get a feel for who you are, but that is not what you want them to buy! Your home should be an entity unto itself without the encumbrance of your property getting in the way of a buyers viewing experience. Each room in your home likely has a few things that could get in the way of a proper showing. When preparing your home for viewing it is good to pursue a minimalist concept but not to the point of making the rooms look sparse or cold. It is a delicate balance that can be difficult to achieve but don’t let that get in the way of taking the project on yourself!
Sanjog Gopal is a CPA & REALTOR specializing in the <a href="http://www.azresidence.com/search-mls.php">Arizona real estate</a> market. My background as a CPA ensures that I am ideally suited to provide elite service in all aspects of home purchases and sales. For more information <a href="http://www.azresidence.com/contact.php">contact me</a> anytime or visit me on the web at www.azresidence.com.
Staging Phoenix
Phoenix is a hot market, both in terms of weather and in terms of market action. In fact Arizona is one of the most notoriously active markets in the entire country. With that in mind any seller should ask themselves how they can distinguish their home for sale from the myriad of other homes that are currently listed on the Phoenix market. Well, buyers are interested in one thing, an attractive package. This includes both the interior and exterior of the home and the way in which it is presented. Buyers are generally looking for something that is show home quality. Signs of life in a home show are usually a bit of a downfall. If you consider the show homes that builders use to advertise their services or developments, the show homes appear as if they have never been lived in. While this can be incredibly difficult to attain and maintain, it does wonders for a show.
This is a process that is known in the business as home staging and it has sprung to prominence in the past few years. This was fueled by the heavy competition in most home markets around the country and has become a fixture in the real estate industry. Home staging is the process of cleaning the home and eliminating excess items and accentuating the home in a way that showcases the home’s strong points and allows the buyer to see the possibilities for the interior areas. The usual beginning step for staging is the removal of clutter and objects and furniture that is not essential to the sale or daily life. This can be a difficult process as you have undoubtedly become used to your stuff being there, but you have to ask: “will this benefit the sale or restrict it?”
Staging is much more then just cleaning and removing a few things. Many home staging businesses hold a larger stock of art and furniture that they will happily bring in to help the home sell. These designer pieces are usually coordinated to show off the home to it’s best ability. This will also allow you to get some of your things out of the way which should make things much easier come moving day. If you have the motivation to stage your own home, perhaps seek the advice of a design professional for some pointers on showcasing your home to the best of it’s ability.
Anne Eliason is a world traveler and Phoenix real estate agent. Anne's travels have endowed her with a lifetime of experience and worldly knowledge that she brings to the Phoenix real estate market. For quality and intelligent service dealing with Phoenix, AZ homes and properties contact Anne today or visit online at www.anneeliason.com
Save time and money via online real estate websites
In this hi-tech age and at a time when the internet has overcome most of the problems and gained buyer confidence, buying anything from an online store is a very common thing. Anything can be bought or sold through your computer in the comfort of your home. Hence, it is not surprising that big real estate developers have also plunged into online real estate and prefer real estate portals for their property dealings rather than going through property agents. These real estate portals are made to make your life easier. Through these real estate websites one can get information about the world s best locations. The costumers can view listings. They can also compare prices of different areas and locations. The best thing is that they can watch the videos and photographs of the property which is to be sold. On these real estate websites the costumer can talk to the owners of the property and can clear any doubts firsthand regarding the property they are planning to buy. They can also apply for a loan for buying a property and can also buy home insurance online. All this can be done from the comfort of your chair. It doesn t matter whether you are looking for residential, commercial, or industrial property, online real estate portals offer you full online listings with all these property categories. For everyone alike, be they a real estate vendor, renter, or buyer, there is a great variety of properties listed on these websites. But there are many precautions also which need to be taken before you consider any online real estate website to buy a property. Checking the background of a website and the seller is very important. Investigate the reputation of the website and how long the website has been in existence. See if there are any complaints against that website. Wherever possible, go and check the property you are about to buy in person. Do not sign any agreement or make any payment before you have made an inspection of the property in person. Never rely solely on the pictures and videos that are posted on any website. Always ask for original documents of the ownership and insurance. Also check whether there is any loan existing against that home or real estate. It is important for you to protect your credit card or bank account privacy and hence dealing with a reputable online real estate portal is a must. Check carefully whether the property you are about to buy will give you good returns in the future. This depends on the area where the property is located. Every effort should be made to see the location and the potential of the location in terms of real estate business because the location and surrounding is as important as the property. Buying a home online can be very easy. The only things the buyer needs to know are the actual price of the property, condition of the property, and they should be familiar with the legalities and paperwork which are required for the transfer of the property. If every thing is done correctly a person can usually save more than five percent by buying a property online.
Jacqui Smith is the owner of No Agent Property, a service specializing in <a href="http://www.noagentproperty.com.au">Private Real Estate</a>, <a href=" http://www.noagentproperty.com.au">Homes For Sale</a> & <a href=" http://www.noagentproperty.com.au">Private Property Sale</a>.
Finishing Touches For Home Sales
Having planned your home sale carefully and really taken the time to make your home shine like a diamond you may find yourself asking “What’s left that I can do to make this place a little more impressive?” Well, let’s look at at the list and make sure everything is taken care of before we move on. The home has been cleaned and prepared for showing. The furniture is arranged in the best possible fashion to show off the size of the rooms. All surfaces are clear save for a few decorative elements. The yard is clean and clear with trimmed lawns and bushes and well tended gardens. So what’s left?
This is the time when you really want to worry about the little things that buyers notice when they are looking around your home. Or maybe the things that buyers will smell around your home. Pet smells are a big culprit here. If you have pets, chances are that there will be some odor that you may have grown accustomed to and don’t really notice anymore. Eliminating these odors can be a big bonus to any home sale. If you don’t have pets then it’s still a good idea to try and make sure that your home smells as pleasant as possible before potential buyers come to visit. If you are one of those people with a taste for strong smelling or spicy foods, then avoid them for a day or two before the show.
This is also a good time to consider how each room will present to viewers and whether or not any small changes need to be made anywhere. Think about the light in each room. Is it sufficient to light up the room? You don’t want rooms to appear gloomy, especially if the home is showing in the evening. Posters on the walls? This might not be the best selling tool. Replacing posters with properly framed prints can make a room look more complete and cultured.
On the day of the show get up early and do a final clean of the home. Dust everywhere so that everything looks it’s best when viewers arrive. Make sure that any breakfast mess is cleared away and there aren’t any clothes lying about from the past few days. Try to envision that show home in the magazines and as you leave the home for the day think about what viewers will notice first when they arrive and when they first enter the house. Make sure that these are positive things and the show will go according to plan.
Virginia Wherland is a REALTOR as well as the founder and broker of Associates Realty. Associates Realty is proud to specialize in Edina, Minneapolis real estate. For access to the beautiful homes and properties in Minneapolis, contact Associates Realty today or visit us online at www.associatesrealty.net
Sell and Rent Back - Sell and rent back your home to raise money in these tough financial times.