Let's Think Positively For A Change

Well, this has sure been a week full of real estate media crapola. I mean it! I'm sick of reading and hearing about how real estate continues to deteriorate.

I've been hearing on CNBC about banking and mortgage garbage all week, and how normally well qualified buyers can't get a mortgage from the banks.

I've been hearing on Fox and NPR about how the Obama programs to save people from foreclosure are mostly failures and serve only to build up false expectations and set people up for future failure.

All the major networks have been banging away about the new foreclosure crisis and I can see loads of legal entanglements for banks versus homeowners on those issues in coming months ... and maybe years.

This morning, I read in the St. Petersburg Times that the Case-Shiller Home Price Index for August says Tampa Bay home prices dropped another 4.1-percent for the year ended last August. The only market that was worse than ours was Las Vegas, where prices fell 4.5-percent for the same time period.

This week past, somebody even e-mailed me some colorful charts and graphs to let me know how far real estate prices have fallen since reaching their peak in 2006. Like I need a graphic representation for this disaster, you know?

Hey, are you as tired of this kind of media coverage as I am? I mean it. I'm sick to death of reports of real estate doom.

Here's my suggestion: Only look on the bright side of real estate.

Don't say that ONLY a few hundred homes were sold this month. Say that a few hundred people found their new homes here in Tampa Bay ... that's great for them.

Don't say that real estate prices dropped another 4.1-percent. Say real estate prices are now a little more affordable, making this a great time to be looking for a new home.

Don't say that bankers are making it hard for credit-worthy people to get mortgages. Say that the new mortgage requirements will strengthen the credit system in this country and help us avoid future mortgage problems.

Don't worry about all those foreclosed properties on the market. Sooner or later they will all get sold at low prices ... and in a few years it won't matter anyway.

And when you hear the words "real estate" and "Obama" in the opening paragraph of the same story on Fox TV, change the channel immediately because even it it is good news, Fox will make it sound negative. It's what they do!

I say we dump the negatives, stress the positives, and get on with things as best we can.

Happy Selling!

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Foreclosure Scams And What To Beware Of

I guess every real estate writer has at one time or another written a story about short sale and foreclosure scams.

Well, I gotta put my two-cents worth in on these crooked dealings as well.

Did you know that one out of every 139 homes in America got hit by a foreclosure filing in the third quarter of this year, or so says RealtyTrac. 102,134 homes were actually repossessed in September.

With that many foreclosures, it is no surprise that the scavengers are out there sniffing for blood. Mostly, what these vultures do is try to convince unsuspecting homeowners into paying them in advance for advice which they say will save you from foreclosure, or they tell you that for a fee they will intervene with your lender on your behalf.

Investor's Business Daily has just published an article carrying the six danger signs homeowners should be on the lookout for if they are in danger of foreclosure. Here's a synopsis ...

1. Advance Fees. You are contacted by a person or firm who indicates that he will contact your lender and arrange for your loan to be modified, refinanced or reinstated in some way. Their only condition is that you pay them a fee in advance. Beware! Most likely they will take your money and never contact your mortgage company. Just say "no" to such proposals.

2. Counseling For A Fee. This scam involves the homeowner paying a fee in advance for advice they can get for free from their lender or from some other source, like HUD.

3. Guarantees Of Help. If somebody "guarantees" that they can halt your foreclosure, they are probably crooked. Run, repeat, run away. Any kind of negotiations about halting a foreclosure must be between the mortgage company and the lender, not some third party. There are usually some upfront fees involved in this scam as well.

4. The Leaseback Scheme. This is a beauty of a scam. The crook convinces you to sign the title to your home over to him. He says he can get a lower mortgage rate than you have. Once he has title to your house, he'll lease it back to you for less than your current monthly mortgage. Eventually, he'll let you buy it back from him. You don't believe that, do you? What is more likely to happen is that the scam artist will never sell the house back to the original home owner, and will eventually evict the homeowner. Don't fall for this scam.

5. The Bankruptcy Strategy. For an advance fee, the scam artist tells you he can save you from foreclosure through bankruptcy. Baloney. Bankruptcy only stops foreclosure for a short period of time, but it will put a black mark on your credit record for years.

6. Fake Government ID. Be on the lookout for crooks offering help as part of the federal government. Anybody with a laptop and inkjet printer can make some official-looking business cards and ID's. Before you start taking advice from such a person, call his agency and see if he really is an employee. Or, check with your lender to see if this person is on the up-and-up. Anybody can put the words "Federal" or "TARP" on a business card.

Well, there it is. Six good things to be looking out for if you are facing foreclosure. And a tip-of-the-hat to Paul Katzeff of Investor's Business Daily for writing such good info.

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A Thought On The Foreclosure Crisis

Apparently "robo-signers" have falsely verified hundreds of thousands of foreclosure documents in recent years. This has happened so often that several of banking's big-boys have now halted foreclosure sales and closing proceedings in order to review banking procedures and make sure everything was on the up-and-up.

As you might expect, its the same old banking names that have been heard so many times before in matters involving the real estate mortgage problems faced in this country -- PNC Financial Group, Ally Financial's GMAC Mortgage Unit, Bank of America, and JPMorgan Chase & Co. Let's hope that no other institutions are involved.

Let's also hope that these financial giants are able to resolve these matters without hurting anyone along the way. I hope they can.

But suppose they can't.

Suppose, hypothetically speaking of course, that we find out that bankers did indeed improperly foreclose on the homes of bazillions of people. Suppose those bazillions of people file lawsuits designed to get their homes back. Suppose the courts agree with, say, half-a-bazillion of those original homeowners and rule that the banks foreclosed improperly. Now, further suppose that a quarter-of-a-bazillion of those homes now have new owners. The lawsuit certainly creates a question of who properly holds title to that property, does it not? Will this kind of circumstance not create a major financial problem for the title insurance industry who will have to make some kind of settlements on the title for a quarter-of-a-bazillion insured property titles?

Hey, I'm not trying to borrow trouble here and I hope this scenario does not happen, but give it a few minutes thought yourself. How much money will the title companies have to come up with? Do they have that much money laying around in the old savings account? Is the title insurance industry "too big to fail"? If it is deemed to be too big to fail, are we looking at some new government-funded bailout? Ultimately, will this be more taxpayer money used to bail out the title insurance industry because bankers made thoughtless mistakes? Or, will the title insurance companies file lawsuits against the bankers in order to recoup their losses which were caused by the bankers charged with filing the foreclosures? (Gee, that sounds like a lot of nice work for the lawyers on both sides, doesn't it?)

Hey, I'm just asking a question. I don't necessarily have any answers. Am I borrowing trouble? I sure hope not. I'm hoping all this gets resolved and turns out to be nothing but a tempest in a teapot. But when a lot of money is involved and lawyers get active, well, you never know what will happen.

I think it is an issue worth watching for the next few weeks.

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