It was only a matter of time before some folks began figuring a way to cash in on this. Last week, I read about an attorney who has developed a specialty in keeping people in their homes and actually is viewed as an expert on this matter by other attorneys. It reminds me of all the commercials promising folks that their IRS debts can be reduced to 10 cents on the dollar. That may apply to a few, but not to most, but everyone who goes for it is going to wind up paying thousands of dollars of fees to get mostly nothing. I suspect that may apply to some of the home foreclosures as well.

However, this foreclosure mess is a much bigger problem than a few folks losing homes. The real issue IMO is the threat to the banking system along with a number of other financial institutions. The chain of title problem on the mortgages throws into question the value of mortgage backed securities that were tied to them and placed everywhere–pensions, insurance companies, banks and etc. And rather than allowing the free market to discipline the banks along with the homeowners, it appears that there are moves being made to bail them out again–this time with money printing.

I say free market discipline for all is in order. No one should expect to keep their home if they default and no one should expect to be propped up if your lending criteria simply involved someone's ability to fog a mirror. As it is now, the heavens are being moved to avoid the guilty financial institutions from paying for these errors not to mention the absence of fraud prosecutions for some.

artist: Jason Mraz.

this link will give you the lyrics!!
this is my favorite song

BIGGERHAMMERTEXAS

Yes, I am a “Designated Nehemiah Specialist” but even if I wasn't I see the very important need of being able to get people into home ownership with little or nothing down. That's the biggest hurdle for so many.

These are not Fog the Mirror Loans, they are not Liar Loans, they are fully documented, fully underwritten loans for qualified buyers, purchasing the property they will live in (No Investment Property). Their one and only stumbling block is the down payment.

In the big picture, if you want to move out of this housing crisis, someone is going to have to buy that excess inventory.

Thanks for this post. I'm glad to see that cooler heads prevail in Seattle too. I couldn't agree more that to call this an out and out panic and catastrophe blows things way out of proportion.

Specifically as things apply to our world of real estate, far more of the “bad” is without question behind us than in front of us.

Look at all the corrective actions that have long been overdue.

Problem: Too much money lent to underqualified borrowers. Result: High foreclosure rate. Corrective Action: Lending standards tightned.

Problem: Real estate appreciation outpaced consumer affordability for years. Symptom: The average American could no longer afford an average home. Corrective Action: Prices fell.

We are well into the needed corrective actions. Is all of the fallout done? Surely not. But are banks giving money to anyone who can fog a mirror…uh, no. They stopped doing that 18 months ago. Are sellers flipping houses for 30% profits? Again, that's ancient history.

Are we at the bottom? Hmmm…maybe…maybe not. But I'd bet you my last Krispy Kreme (the worlds most decadent donut if you don't have them where you live) that we're awful close.

Great job Jenn.

Chris Martin
Success Coaching and Consulting