The Confusion Continues
November 18th, 2008Banks like Citigroup plan to renegotiate loans for those not yet behind.
Countrywide said today wait to contact us until you are three months behind.
During my most recent conversation regarding a listed short sale Countrywide said “we don’t want any involvement until you have an offer” with no discussion of pricing the property.
The Tarp plan has changed directions and no one understands where it is going or who it will help. As the de-leveraging continues and prices fall, foreclosures and defaults increase and it remains impossible to know the full extent of the losses or how long this will continue. Unemployment is a looming nasty wildcard. Banks vow to help millions of families, but can they really make those high dollar mortgages affordable or will they just prolong the pain and postpone the inevitable? Renegotiating much of the secondary market paper will be impossible.
Some banks continue to take weeks to respond to offers, and list REO properties at above market value prices. No one knows for sure who is holding all the bad assets or how bad they will become. Some banks will just write off the losses while others plan to pursue collection efforts and default judgments after short sales and foreclosures. Many second position lenders and PMI companies are exposed to (100%) loses. Wall Street is clearly worried along with the economies around the entire world.
Prices are coming down dramatically on some properties, and yet some cash buyers continue to pay 2006 prices on other properties. It must be either; buyers who are completely uninformed about the market and unrepresented or else they found the only home that fits their exact needs and makes them feel the best. With such erratic prices dual agency for agents will become far more dangerous.
Many properties will have to be sold now to raise cash. All this uncertainty is paralyzing most buyers at a time when they should be laying out their plan to take advantage of the margin call properties going on sale.
The one thing that does make sense right now is that the lenders do have money to lend at very favorable rates for those with a down payment, good credit, and the ability to repay.
Chris W. Miller
ERA Brokers Consolidated
Mesquite NV 89027
702- 346-7200
435-862-5951