Saturday, August 14, 2010

The Real Estate Fiasco

Because I have been selling real estate and because I want to keep my license current, I have to attend so many hours of continuing education per year. I just finished some of those required hours.
Here's some information you might find interesting.
1. An economist from ASU said the housing stimulus is such a failure, that 70% of homeowners that took out the government-backed loan modification are all ready in default.  A better solution would have been to give all homeowners with mortgages under $500,000 a 1/3 reduction in principle.
2. Beware of loan modification scams.  There are several companies out there that sound like they work for your bank, but don't.  They tell you your loan has been "temporarily modified pending permanent approval", only to take your monthly payment and disappear.  You don't know this until your bank starts foreclosure proceedings.
3. Another marketing ploy to sell homes is a raffle. Everybody buys a chance to win the property with only a $100 raffle ticket.  Sounds good?  Many of these homes do change title...to a relative of the seller.  The seller pockets the cash.
4. Foreclosure homes that sound too good to be true, can be.  Homeowners that lose their homes are discouraged and desperate. They have nothing to lose, so they sabotage their homes.  Some even pour cement down their plumbing systems.  Once it hardens, nothing can be done but to redo the entire home's plumbing system. This is frequently not found on the home inspection because not enough water is run to cause a backup.
5. This is happening more and more...an owner cannot pay their mortgage, so they move out.  They rent the home and sit and wait for the bank to foreclose, meanwhile, the tenant is unaware. The tenant keeps paying the owner their rent until one day, they have the rude awakening of a foreclosure notice on their door or the property's locks changed.

What's the answer?  As always, Buyer Beware. If it seems too good to be true, it probably is. If you are buying a new home, seek out a Realtor with credentials and select a reputable mortgage officer or bank. If you're unsure, get a referral from a friend you trust. 

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