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Today’s Real Estate News 4-6-2011

06 Apr

Yesterday the responses I received from you overwhelmingly said that foreclosure flippers are doing us all a favor and are good for our economy.  Today’s question:  See the NAR Article below and answer this:  If a borrower is upside down in his/her home (not delinquent and still employed), is it OK to walk away from the home and let it go back to the bank?  Feel free to email me at acarollo@stewart.com or post your thoughts to my blog .

Today’s news that may be of interest to you:

Republicans Considering Another 16 Bills on GSE Reform
HousingWire | April 5, 2011
Republicans on the House Financial Services Committee are planning to submit another 16 bills for the reform of Fannie Mae and Freddie Mac.

Fed Sees Steady Recovery Despite Turmoil, Minutes Show
The Washington Post | April 6, 2011
Global turmoil and potentially steep budget cuts have heightened economic uncertainty, Federal Reserve leaders concluded at their last policy meeting. Yet the nation’s recovery was still on track, the officials said in choosing to maintain their current bond-buying policy.

Amid Bailouts, Banks Spent Big to Thwart Foreclosure Legislation
Los Angeles Times | April 5, 2011
Through the depths of the recession, major Wall Street banks and other financial institutions spent nearly $70 million in California to try to defeat or water down California legislation aimed at slowing real estate foreclosures.

SEC Fannie Mae Probe Said to Examine CEO’s Testimony to Congress
Bloomberg | April 5, 2011
As the housing market deteriorated in April 2007, Fannie Mae Chief Executive Officer Daniel Mudd reported to Congress on his company’s health. The firm’s exposure to subprime loans, he told lawmakers, “remains minimal, less than 2.5 percent of our book.”

Fed chief: Reduce U.S. Role in Housing
Minneapolis Star-Tribune | April 5, 2011
Minneapolis’ Kocherlakota said the market relies too much on government guarantees.

Email Theft: 5 Ways to Avoid Phishing Attacks
Reuters | April 6, 2011
With the extraordinary theft of millions of email addresses collected by some of the nation’s biggest companies, it’s time to think about the likely result – phishing attacks – and how to avoid becoming a victim.

From the National Association of Realtors®:

Don’t Just Walk Away From Mortgage, Survey Says
Sixty percent of Americans say it should never be an option for home owners who are underwater on their mortgage to walk away, according to a survey from FindLaw.com.

FTC Warns of Timeshare Scam
Scammers are preying on timeshare owners who are desperate to get rid of their properties, the Federal Trade Commission warns.

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Anthony V. Carollo / President
Stewart Title of Spokane
606 W. 3rd Ave.
Spokane, WA  99201
Telephone: 509.328.7171
Direct Line: 509.321.3939
Direct Fax: 866.652.8834
acarollo@stewart.com

Please remember to choose Stewart Title of Spokane on your next transaction!

www.StewartSpokane.com

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One response to “Today’s Real Estate News 4-6-2011

  1. Michael Mullin

    April 6, 2011 at 10:53 am

    “If a borrower is upside down in his/her home (not delinquent and still employed), is it OK to walk away from the home and let it go back to the bank?”

    Anthony, that’s a really tough question and one I believe is dependent upon each family’s situation.

    First, let’s agree it is never “ok” to walk away from a personal obligation – which is what each and every borrower made when they signed their loan documents. No question.

    However, from my perspective the rules were changed when the banks took my tax dollars to bail themselves out. They benefited greatly from TARP, when they should have been out of business for being “upside” down on their balance sheets.

    Was it “ok” for the banks to get bailed out?

    No, one misdeed does not outweigh the other. I’m just suggesting the “okness” of walking away from an obligation was blurred by the government handouts to the “too big to fail” banks.

    From a professional standpoint I can tell you that the viewpoint from Spokane, WA is really different from that of Las Vegas or CA.

    I get about 2-3 calls a week from past clients who are upside down asking me for help.

    If they are calling from the Spokane area they are maybe $20k upside down or maybe even less, after factoring real estate commissions for selling the home. For the average middle class family that $20k is a pretty tough hit to take.

    If the call is coming from Las Vegas or Sacramento, CA the amount is often $200k or even more. A home someone bought for $400k in 2007 is now worth maybe $190k. It’s hard to imagine how long it will take for the values to rebound to 2007 levels. Many families are feeling hopeless.

    Speaking to families in these situations (even the $20k situation) is heartbreaking. They are embarrassed they’ve ended up in this situation and feel there is no solution but to walk away and start over.

    No, it is not “ok” to walk away from your mortgage. However, in some situations it is the best option for the long term health of the family.

     

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