Credit Challenged Society! What do we do?

By
Real Estate Agent with REMAX real estate associates

With all the foreclosures, short sales, write offs, job losses. Who will be left to get this economy going? I have said many times the government must key this crisis recovery at the strong. They must make guarantees and funding available to investor that can and will buy the distressed assets. They have since spoke about and worked on various programs to start it up. They must focus more on each niche.

Niche 1, Recycling Our Population

What is to happen with all the people who went under water, many of which were not financially stuck but there asset went under water. This was not their fault but the fault of government policy makers, banks and financial institution that over pumped the market. Should they be left out of the market for a long period because of this?

For example:

Home buyers Jack & Jill bought a house for $1,000,000 in southern California. Jack & Jill put 10% down and got a 90% mortgage. Jack & Jill's home came down in price and is worth $500,000 now. Jack & Jill chooses to walk, they were under water $500,000 and had no hope of getting back to where they started.

Home Owner Jack & Jill had a job and were financially ok, but their credit is damaged now from the foreclosure. What should happen now? Should Jack & Jill's credit stay bad for sometime until he could participate again or should Jack & Jill be forgiven.

I say, individually underwrite Jack & Jill a new load so they could buy a house in the current market. Adjust the credit score to compensate for the foreclosure or don't use a credit score at all. Look at the ability to pay. It was not Jack & Jill‘s fault that all the rules were broken and government policies and overzealous financial institution cause a bubble. We need Jack & Jill back into the normal market.

Recycling is what we do with everything else; we must do it here also. Would you have stayed? 

Richard

View my new homes for sale     

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Rainmaker
285,954
Marilyn Harrell
ReMax Riverhaven - Beaverton, MI
Wixom Lake - Beaverton MI

Sure, give them a loan, they need a house to live in until they lose their jobs, then they can do it all over again? why not?

March 07, 2009 10:45 AM #1
Rainmaker
170,297
Richard Stabile
REMAX real estate associates - Woodcliff Lake, NJ
Bergen County New Homes Builder Realtor

Marilyn, it was not focus at a person who could not afford it. Anyone could loose there job. It really is to seal with the revaluation of the market.

Richard

March 07, 2009 09:23 PM #2
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1,145,418
Paul Henderson
RE/MAX Professionals. - Tacoma, WA
I always put my clients first in any transaction!

What would Andy Rooney Do???

Critical Eyes

He would blame the Bush Administration and the go back to sleep!!!

March 08, 2009 11:17 PM #3
Rainmaker
170,297
Richard Stabile
REMAX real estate associates - Woodcliff Lake, NJ
Bergen County New Homes Builder Realtor

It Acturally was started by Bill Clinton, It just took a little will to build up and morf into a crazed mess!

March 09, 2009 08:00 PM #4
Anonymous
Anonymous
Joe Finnerty

I don't agree that just because a house went under water the owners should be given a free ride to walk away from the house. With that mind thought, almost every American would walk away from their house.

Now, a job loss or financial crisis is a different story. That's why this problem is so hard to solve. I have diligently paid my mortgage even when times were tough. Yet, some home owners are going to get breaks on interest rates. Doesn't seem fair does it?

Joe Finnerty
www.lehighvalleyhomesonline.com

March 10, 2009 10:20 PM #5
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Christopher and Stephanie Somers - Realtors - Philadelphia Real Estate
Realtor / Owner - RE/MAX Access - Philadelphia, PA

Richard - It is really hard to say what one would do in that position to be $500K underwater.  Ouch !  You raise some good questions just not sure what the answers are ! 

March 11, 2009 05:38 PM #6
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Rainmaker
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Richard Stabile

Bergen County New Homes Builder Realtor
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