Posted on 10/12/2010 7:27:12 PM PDT by blam
Still Wondering If The Foreclosure Freeze Will Hurt The Housing Market? Ask The NAR
Joe Weisenthal
Oct. 12, 2010, 8:15 PM
The NAR is panicking. That should tell you what you need to know. As we've argued, there's no silver lining for housing in the plan to freeze foreclosures.
Their full release below:
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Thousands of first-time and move-up buyers who hoped to make a foreclosed property their new home now face uncertainty, anxiety and possibly remorse as they worry that closing on their desired property could be in jeopardy.
For many, the dream of homeownership could turn into agony if their home purchase is indefinitely delayed by a moratorium on foreclosures declared by some banks, the National Association of Realtors® said today. The moratoriums are needed, banks say, to review all of the foreclosures in their portfolios to make sure they’re in compliance with the law and that titles are clear.
NAR warned that a prolonged review process would have a damaging impact on many communities and hinder the nation’s economic recovery.
“As the leading advocate for homeownership issues, we understand that many lenders need a time-out to review their actions to ensure that homeowners are not improperly foreclosed on and that the lenders are following regulations and state laws. After that, the foreclosure process must resume quickly to return stability to families, the housing market and the economy,” said NAR President Vicki Cox Golder, owner of Vicki L. Cox & Associates, Tucson, Ariz.
Over the past few months NAR has met with officials of top banks to discuss market issues. NAR urged banking leaders to seek resolution quickly through loan modifications and the short-sale process rather than through foreclosure. “We stand ready to help lenders develop better short-sale procedures,” Golder said.
[snip]
(Excerpt) Read more at businessinsider.com ...
Foreclosure moratorium hurts the real estate market on both ends.
Not only, as the article points out, it delays the prospect of foreclosed properties going on the market, it makes it more difficult for folks to get mortgages.
Lenders are put in much more risk if they are unable to act on the collateral for bad loans.
I have never in my life, no matter what, heard the NAR say anything other than “But it’s still a great time to buy.”
So, yes, this is bad. Very bad.
The short-sale process does nothing to fix any inherent title problems that are part of what is causing the foreclosure moratorium.
This group, as usual, is just nuts.
This will have a couple of effects.
It will hurt Realtor commissions, which is why the NAR is saying this.
Taking these homes off the market will drive up the prices of the other homes not in foreclosure.
And it may cause lenders to become more aggressive foreclosing homes in the 27 states that do not have judicial review.
Some knowledgeable mortgage originators I’ve been talking to expect the moratorium to increase market prices in the short term due to a supply shortage in the NYC suburban market.
They read all of these websites we read, and they mostly agree with the further secular drop in prices over the next several years. However they really believe that the rate of household creation will outpace the supply... causing median prices at each price point to rise for the next year or so, except for $1MM homes which is oversupplied atm.
ANother point... less than 15% of short sales listed as pending on MLS services in north NJ are actually closing. Which is also causing prices to increase as the banks are simply blocking short sales en masse here and foreclosing to sell at market price. Which means in the end... most of the NJ foreclosure activity is selling closer to market rates already...
Most of these foreclosures aren’t actually subsequently purchased by retail buyers...they’re purchased by real estate holding companies (owned or operated by realtors), marked up 20%-30%, and put back on the retail market.
“Taking these homes off the market will drive up the prices of the other homes not in foreclosure.”
Law of Unintended Consequences for $100 please?
National Association of Realtors® is a self serving group of sleaze bags. They are only looking to close deals in a terrible market. If the buyer gets burned, they will always get their commission.
Be aware the up here, the National Association of Realtors® is funding Paul Kanjorski with heavy tv buys telling us that he saved the industry with Gov’t bailouts along with Fanny and Freddy.
I assumed that this was the goal ... to drive up prices.
There's no shortage of entities who can benefit from that, starting with the public employees whose jobs are funded by property taxes.
The only buyers will be big players with cash, but why buy if you can't sell?
You could buy cheap (with cash), then rent the property and make a profit, but many neighborhoods don't allow it. Zoning, and property values, etc.
It is a royal mess...
Translated:
“As the leading advocate for churning the housing market like a food processor on Benzedrine, we understand that many lenders need a time-out to increase their campaign contributions to ensure that ratings agencies are not improperly prosecuted and that the lenders are exonerated by future regulations and state laws. After that, the bubble blowing process must resume quickly to return commissions and fees to bankers, appraisers and the realty profession,”
Am millions of American homeowners realize that NOTHING (good) will be done for them regarding their particular foreclosure situation, they will simply default on their mortgage payments and SAVE CASH MONEY for the purpose of taking care of their family FIRST!
They will hold these monies very tightly and thus, the American economy will be HAMMERED into another deeper darker period in time.
A+ grade on that translation! :)
The NAR is a useless propaganda tool. They claimed “Buy now, prices only go up!”. When prices fell they said, “Buy now, prices will only go up!”
Produce the Note.
If you read about foreclosures and don’t see anything about the note, skip on to a more credible source.
The bottom-line analysis is that at the end of any mortgage, foreclosed or not, the original note has to be returned to the borrower. If the original note cannot be returned, the title to the property is clouded.
The question to find the answer to is whether your loan has become securitized. If so, likely the note has been destroyed and will never be able to be returned to you when the loan is paid off. You are paying premium prices for a toxic title.
The ‘deadbeats’ who stopped paying on their worth-less toxic title home may be clueless, but if the lender has no moral objections to altering the mortgage to make it worth less than originally agreed, the borrower should have no moral objections to devaluing their investment of time and real money into the mortgage.
The idiots are the borrowers who are incited by the lenders’ trolls espousing the shame of a broken promise, not realizing it is a deflecting ploy to avoid shedding light on the perpetrators of the change - the lenders.
NAR cries crocodile tears on behalf of home owners.
Asking a realtor if it’s a good time to buy a house is like asking a barber if you need a haircut.
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