The Real Story…
News and commentary about the real estate market and related topics.
Dave Parrish, ABR®, CRSA, CSP, GRI, ePRO®,REALTOR ®, RealtySouth
The opinions expressed here are my own and don’t necessarily represent those of HomeServices South.
Foreclosures Remain on Hold…
Last week’s story continues… Freezing of Foreclosures in the marketplace.
There seems to be a rash of commentary about how bad freezing foreclosures could be for an already troubled real estate market. While there is some validity to those arguments, the impact of the freeze as it is currently defined will probably have no more impact than the lull in the market created by that 90 day period following the end of the Home Buyer Tax Credit and certainly not as much as the crash of the financial markets in October 2008.
The proposed 30-60 day freeze (still voluntary in Alabama) will in fact have little impact on the overall market as the glut of foreclosures will continue for several more years (my best guess is at least 24 months following a drop in the unemployment rate below 6%). The major impact will be felt by purchasers of foreclosed properties in the 23 states directly impacted by the court ordered mandate to evaluate documents prior to proceeding with the foreclosure process. Also effected are the foreclosures held by the companies like Bank of America that entered into a voluntary stay of foreclosures in the remaining 27 states.
That impact will be felt in terms of delays in closing the purchase transactions. The ability to wait out the process will be paramount… but then that seems to have been the case in many foreclosure transactions for the past 18 months. Many buyers will simply be unable to delay their purchase and will move on to non-foreclosure properties.
The powers-that-be seem to have indicated their unwillingness to mandate any prolonged stay of foreclosures, as it will have little if any impact on the actual outcome. With that in mind, I am wondering what the government will do to keep the lenders honest. I remain concerned about a fair and equitable process… I see no real winners in the foreclosure mess as it exists today; although, the big boys of banking do seem to have a leg-up on everyone else.
On the up-side, homeowners who are trying to sell their home and having to compete against the foreclosure inventory may find some temporary relief as the foreclosure inventory is in this hold pattern. My advice is don’t waste this opportunity.
There have been many changes in the real estate and home mortgage fields over the past 24 months. All seem to have fallen short of making a balanced and meaningful change in the process other than eliminating much of the aid for the weak-side of the market. The pendulum still swings wildly to extremes!
By far the most important issue in terms of the health of the Real Estate market is a reduction in the unemployment numbers and elimination of organizations too big to fail that require government assistance to survive the effects of their own avarice… Again I repeat my call for regulations that favor the small community banks of the mammoth organizations that seem inclined to operate solely in the interest of profit and using the shield of inter-state commerce to protect themselves from usury laws. While small community banks may still operate chiefly in the interest of their shareholders, they do come under the scrutiny of local regulation and if not serving their communities effectively are certainly not too large to fail.
May the Market be with you.
