Maxine Waters Tries to Get Loans Modified but Gets the Brush Off from Banks

Don't try this at home folks. As this newscast showed, US Congresswoman Maxine Waters was brushed off by Banks when she , an Attorney and US Congresswoman, tried to help 3 families avoid foreclosure on their homes.

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How We Got Here: It's Housing, Stupid

by Chris Isidore
Thursday, September 18, 2008
CNN/Money.com

The Wall Street crisis has been caused by plunging housing prices. So despite the billions of dollars being thrown at the problem, experts say more trouble lies ahead. The nation's financial system is in the midst of a massive shakeup and many on Wall Street and in Washington are pointing fingers and looking for someone to blame. But in the end, it all comes back to one issue - housing. Read the rest of the story...

Richard's commentary...

This story does not mention the huge greed factor nor the lack of government regulation of the financial institutions making these risky "bets" on the housing market. Many mortgages only required a "breathing person". "Yes I work a minimum wage job but I am telling you that my income is $200,000 a year", and that is almost what many of the lenders wrote down. Because the home was collateral for the loan...no worries...we will just take it back on foreclosure and sell it to someone else for a profit....because home prices will ALWAYS GO UP.

What nonsense!!! Real Estate is and always will be cyclical with ups and downs with the overall trend upward. Now there is a large downturn in home values and the financial institutions that bet wrong are going down the tubes.

A little common sense here from common people. Would you just give a property as valuable as your home to someone who told you he made a lot of money but did not show you with proof and with none of his/her cash in the deal? Would you sell your car to someone you did not know who just told you he would pay you but offered no proof that he/she could and drove off into the sunset with you holding a worthless piece of paper? Of course not. Then why did the financial institutions do that? And who is accountable for it?

When Franklin Roosevelt was President during the Great Depression of 1929-1941, Financial Institutions were divided up into commercial banks, savings and loans, insurance, stocks & bonds, real estate....distinctly separate and not allowed to compete in each other's business. Banks could not sell life insurance, Stock Brokers could not have checking accounts and other bank functions...you get the idea.

Then in the 1980's and continuing to now, deregulation was the mantra. Get the government out of business and let the market take care of itself. Now all Financial Institutions seem to be intertwined and offering the same services chasing the same consumer/investor dollar. Now greed and the need to have ever increasing unrealistic profits to push up their share prices on Wall St.

Well, the market has spoken. Many of the very wealthy and influential that were involved in causing this fiasco escaped without loss before the big melt down and may actually be receiving Gov't handouts as well. We the average taxpayer are going to pay for many years for this in many ways.

What to do now??

Get out there and buy your home or investment property now before the coming credit crunch knocks you out of the market with higher interest rates and much tougher qualifying standards. Rates are low, prices are affordable, there is a great selection of terrific deals, and it is still easier to get a good fixed rate FHA loan.

Get moving before you miss out...It's a Buyer's Market now!! The sellers are the ones crying that the market is bad. Think about it....act on it!!

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Got a comment, thought or opinion? Post it on this blog. That is what its for.

Tough Housing Market Complicates Divorce

by Elizabeth Razzi Friday, August 15, 2008
provided by BankRate.com

Divorce is rarely an easy process. But falling home values and sluggish real estate sales are combining to make it particularly difficult right now.Couples aren't fighting over who gets to keep the house. They're scrambling to get away from the burden of it.

It's too soon to see the trend reflected in official statistics; the most recent marriage and divorce numbers compiled by the National Center for Health Statistics date back to 2005 -- just when real estate markets started to turn down from their boom years.
Read more...

"Richard says..."

This is a tough one on several levels but I will stick to the Real Estate issues. I am not Dr. Phil or Jerry Springer, which ever way things are working or not working out. If you are married and bought together in AZ it is usually community property. If you had a committed relationship and had purchased together with both names on the loan and deed, there were different ways to take Title. (Consult a qualified attorney for answers to your specific situation)

If one of you can keep the home and buy out the other with a promissory note and make payments to the other party, that is one option. You could rent it out or get a boarder for a while to help with the payments.

With the promissory note, it could be arranged through a Title Company with an escrow account. The advantages are that the ownership interest of the party that moved out and is receiving payments will be recorded and records will be kept. The parties never have to meet or mail a check directly to the other. When the other party is fully paid off, the quit claim deed is executed and recorded. The house was not sold and both parties benefited from it and did not have credit issues from a forced sale of the home.

Option 2 is to sell the house somehow. You may have to actually pay a check at closing to clear you existing mortgage loan, especially if there is no equity. There is the Short Sale option, which means that real financial hardship must be proved to the lender with financial statements, tax returns, budget records and more. A qualified Realtor that is experienced in Short Sales may be a valuable asset here.

Option 3 is to let it go into Foreclosure. That will greatly harm both party's credit scores and seriously hamper both financially in starting over. Give it careful thought here. Option 1 may work the best. Selling a home normally is an expensive proposition taking up as much as 11% of the Sale Price. That money could be put to better use in your respective pockets to assist both parties in moving on and rebuilding their lives.

To help you know what questions you should ask and how to arrive at the right answer for your specific situation, a FREE special report has been prepared by industry experts entitled "Divorce: What You Need to Know About Your House, Your Home Loan and Taxes". Read it today.

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That's all for now. I welcome you posting any questions or comments about this and any other articles on my Blog.

Have a Great Day,

Richard