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Foreclosures Produce A Win-Win Situation

Published on December 16, 2007 in Uncategorized. 0 Comments

Foreclosures have been getting so much bad publicity in the press lately that to say they are a good thing and produce a win-win scenario for real estate investors, lenders and even homeowners is to fly in the face of reason but let’s examine things for a moment through a scenario that actually happened to me.

I once bought a house for just $3,000. The couple who owned it had to move due to work commitments. House prices in their area had shifted little since they had bought the house and they were ready to default on their mortgage and allow the home they owned go to foreclosure rather than wait months and months to sell the house and then struggle to get the asking price which, at any rate, would have left them little room to maneuver in terms of relocation costs.

I stepped in, arranged to take over their mortgage payments, gave them relocation money and found a buyer who wanted to step in and pay the asking price because of family pressures. I made some money so I was happy. The couple received more from me than they would had they tried to sell the house themselves and move, so they were happy. The lender had got their money back and had not lost anything. So they were happy. This was a foreclosure that produced a win-win scenario all the way and it was only made possible because of the way our economy is structured and the real estate model in a free market works.

Of course there are scenarios where the homeowners have to move for far more serious reasons. Maybe they really are in trouble with money or maybe there is a death in the family and they can no longer make payments. But even in those cases a true real estate investor delivers a win-win scenario. Homeowners, many times, fail to find any solution to their money problems and get caught in a downward spiral with the only outcome the loss of their home and the irreparable damage of their credit history. A real estate investor is an expert who supplies solutions that can work.

Through the process of foreclosure (or even before it) a real estate investor can take over a property, allow the trapped homeowner the ability to move on without the burden of the house any more and can then work to get the property back in the market where it can start delivering value for all concerned.

Foreclosures can deliver a win-win scenario almost every time provided the foreclosure is a real result of the way our economic model works rather than a case of misrepresentation or misselling or predatory lending by a mortgage lender. In that case the equation is imbalanced (or stacked if you like) to favour the mortgage lender and potentially unfair to the homeowner and that is never a good thing. 

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Predatory Lending Is At The Heart Of Growing Foreclosure Issues

Published on December 16, 2007 in Uncategorized. 0 Comments

The great debate, right now, is whether the Fed should step in and regulate foreclosures or should we let the free market regulate itself through its own controls, checks and balances.

First let’s establish that under the Home Ownership & Equity Protection Act of 1994, the Fed has the power to set such regulation which compel lenders to  tighten up on their lending practices and establish a more transparent lending process that is a lot less predatory than some we see at the moment.

According to ACORN, as one of the nation’s top three regulating agencies for the financial industry, the Fed has a responsibility to prevent abusive lending practices. Its president, Maude Hurd has often gone on record to say that ‘The Fed could step in right now and help stem the tide of foreclosures, American homeowners shouldn’t have to wait for Congress to pass new legislation.’

Some of the recommendations made to the Fed by ACORN include:

  • Eliminating prepayment penalties on subprime mortgages
  • Barring lender approvals for loans a borrower cannot afford
  • Limiting use of no documentation/stated income loans

At the moment Congress has not decided one way or another and neither has the Fed decided to make a stand and force lenders to adopt stricter practices and this has left many potential homeowners exposed to lending practices which may, in turn, lead them into situations where they could not meet their debts.

Owning a home is part of the great American Dream and, potentially, anything that is done to make it harder for people to achieve it strikes at the very heart of a sacred cow. However there is a lot to be said against accepting lending behavior that only serves to increase the profits of the lender. Predatory lending practices which do not permit American home owners to fully understand their financial commitment and, as a result, later on lose their home, ultimately, harm the economy at large.

An economy where the number of foreclosures disproportionately reflects the number of new and established home buyers is an economy that is teetering on the verge of a recession with a real shrinkage of services in terms of building new homes, developing them or fixing them and this has a knock-on effect on the retail trade.

It may well be that the market will see sense and predatory lending practices will stop as lending organizations and institutions begin to self-regulate their industry, but if that does not happen the Fed will need to step in or risk having the great American economy go into a fatal tailspin. 
 

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The Foreclosure System Creates New Opportunities

Published on December 16, 2007 in Uncategorized. 0 Comments

If you are looking at the country’s latest real estate news and are wondering whether the bottom has fallen out of the real estate market and it’s maybe time you looked for something else to invest your money in, don’t!

The phrase “safe as houses” did not originate casually. Real estate has always been a great area to invest and though the market has suffered from occasional peaks and troughs these are an inevitable part of the progression rather than evidence that real estate is beginning to lose its glow as a great area to make money.

We are, at the moment, locked into a cycle of foreclosures which has grabbed newspaper headlines eager to catch on anything that will sell copies and it has resulted in a short-sighted feeding frenzy of negative publicity.

Now, this is not to say that an increase in foreclosures is good news. No. Foreclosures are problematic and they are accompanied by a certain amount of heartache and discomfort. They are, also, a vital part of the way our economic system works and act as a self-correcting mechanism which slows down and overheated market and returns balance to house prices.

Without foreclosures the following things would happen: 1. New house buyers would be squeezed out of the market as house prices would rise and rise. New house buyers are part of what drives the housing market so when they are squeezed out of the system it is never a good thing. 2. House buyers would be locked within their particular income bracket in terms of the house they could buy and they would never be able to move out of it. 3. Real estate investors would be unable to step in and jump-start a sluggish economy as there would be no opportunities.

Luckily, the way our economy is structured we have the foreclosure system which acts as a type of gear that allows us to shift down and speed up so we can scale up instead of getting locked in a one-speed market that is destined to run out of fuel.

Foreclosures present the smart real estate investor with the perfect opportunity to create win-win situations where he helps out homeowners stuck in a debt-trap, offers properties to new home owners at prices that allow them to get their foot on the property ladder at a much better level than they would otherwise have been able to afford.

In the process, real estate investors also benefit which is also a good thing for the economy at large. None of this would have been possible without the foreclosure system we have set up as a means of maintaining a balance in our economy.

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You’re First Step to Real Estate Investing

Published on December 4, 2007 in Uncategorized. 0 Comments

There are many smart reasons to invest in real estate, if you’re ready to work hard and face challenges, then real estate investing is your job! First of all you need to know the difference between investing and speculating. If you buy a piece of land and hoping its value goes up, then this is speculating. But if you buy a piece of land and try to earn more income out of it, then that is investing! It is a myth that the value of the property goes up always! - In Japan the cost of properties has fallen by 75% over the last ten years. Investing in residential properties is the best way to learn and understand about real estate. You will definitely learn a lot and gain experience. Jeff Adams training programs will direct and help you to choose what is best for you. Many real estate agents and sellers eventually want you to buy their properties, in order to do this; they are likely to give you wrong or unclear information about the property. Hence, you always need to investigate and collect the correct information about the properties before you buy.

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Why Real Estate Investing?

Published on November 28, 2007 in Uncategorized. 0 Comments

Real estate investing is a profitable market, where you can make money easily with very minimum losses. As a real estate investor you need to use your skills and knowledge to buy and sell properties. But many real estate investors don’t know where to start and where to look for guidance and help. To thrive in this industry, a real estate investor needs to be working hard and be smart! So start planning for your investment wisely even when you are looking for happy retirement life. Jeff Adams brings you very useful real estate investors’ website and programs that will help you to realize the success in real estate investing.

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Tips to Success in Real Estate Investing

Published on November 20, 2007 in Uncategorized. 0 Comments

If you are an aspiring investor in real estate, you need to know certain important tips which will help you to succeed. First of all, you need to compare the property values and rents. Next, try working with a retailer who has enough knowledge about real estate investing who can help you. Learn to specialize in things that you know. You also need to know where the tenants are actually coming from. Taxation is an important part in real estate investing, hence try finding a good accountant to assist you. Try investigating about the insurance coverage and the utility costs. Have maintenance team who can help in repairing the houses. Never buy a home or any property without inspecting it. If you need to know more on how to become a better real estate investor; Jeff Adams and his experts will direct you with their incredible programs.

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Jeff Adams Offers You Outstanding Services

Published on November 16, 2007 in Uncategorized. 0 Comments

Jeff Adams is a top professional and an expert at investing real estate properties who is based in California, we can provide you with extraordinary services including articles and tip for you to know more about today’s real estate investing. Jeff Adams has many years of experience and our services will help you to attain your target just as you wanted. Now real estate investing has be become an excellent business, and engaging yourself in real estate is the smartest choice that you make! With Jeff Adams