Clean Up Real Estate.org

Well, of course the Fed’s will step in and save the day! Some of the more righteous commentators in the financial world are even indignant that the taxpayer might foot the bill. They are talking about moral, get this, moral hazard from the bail out while over two million families are losing their homes this year. It is almost as if the word moral belongs in their mouths instead of lye soap. What use is cynicism if you can’t turn it to your advantage?

What is clear is that the whole system of market manipulation that failed everyone from the bankers on down the line does not work. Not for the brokers who made a lot of money during the inflation of the bubble. Not for the Real Estate agents who are now losing the bigger homes they bought during the boom. Not for Chairman Bernanke who is being derided for trying to save the financial marketplace from itself. Not for the President and certainly not for the millions of people adjusting to the fact that their home is now worth less than they paid for it.

Is what we need a return to the community based lending model that worked to get us out of the last depression? Maybe, but I doubt that will return unless we make it happen at the grass roots. This is going to wake up a few people to the fact that our financial markets are badly formed and too easily manipulated in this all too fast new electronic world.

It is not some evil speculator cornering the market for money, silver, oil, homes or corn. It is the pace of human thought that has been sped up by the electronic aids we all use today changing the value of everything. Markets that respond at the speed of light are subject to feedback and control mechanisms that can send them out of balance all too quickly.

In addition the whole world now has caught up with the idea that consuming more than you produce is a really good life if you can get it. Capitalism rewards some so well that the rest of us are willing to put up with it on the odd chance that we will be one of them. Of course no one in the next generation from the middle class will inherit anything. The reverse mortgage and other financial vehicles even more arcane are taking care of that once and for all.

Does anyone get the fact that our middle class has lost the class war? I think a lot of people do. And boy are they going to be unhappy when the real impact of this failure in the Real Estate market is finally and fully felt in their lives. I think any sane person would be running away from the Presidency instead of for it this time out. This will take more than government intervention to fix. It will take an engaged and perhaps even enraged populace seeking a system that works to preserve their assets and their quality of life.

Two of the simplest rules in business are being ignored. This is the real story of how the housing market misplaced more than two trillion dollars in equity. People didn’t read the contract they signed and ask the right questions. The first rule of all business transactions is to agree to a deal only when it is in your best interest. The second is to make absolutely certain that the contract formalizing the deal is an accurate representation of what you intended to agree to put into writing.

The idea that a notary public’s time is so important that you must not waste it by reading a contract that binds you to an agreement that is changing your life is close to insane. The idea that you must trust your broker or banker is equally ridiculous. READ YOUR MORTGAGE AND UNDERSTAND IT!!!!!!! If you doubt your ability to do so; have it vetted by an advocate representing only you in the transaction. Trust no one above your ability to see what is really in your interest. Verify everything and take your time.

The rush job that signing a big portion of your life and income away has become is a bit absurd on the face of things. None of the arguments that presuppose you need to hurry through signing such an important document hold water. Look at it in advance and have an informed third party review it if you have doubts. Then verify you are signing the exact same document when the time to put your signature on it arrives.

There are three things in my life that are important. In my personal order of importance they are my family, my integrity, and my life. Signing any mortgage document affects all three in my case at least. Don’t let anyone else set the tone time and nature of such a significant event in your life.

There are tricks in the world of business that trap the unwary over and over again. One of the oldest is to get people to sign a document that commits them to something that is in someone’s best interest, just not their own. If you do not have any expertise in protecting yourself then get an advocate to help you. There are a host of them available and some of them will delve further into the mortgage process on your behalf than you can likely do for yourself.

Above all do not trust anyone who makes money from your mortgage without verifying that they are serving your best interests in all regards. That includes: brokers, bankers, salesmen and the people who are trying to sell whatever home you are buying.

This is why home prices are falling more than any one other reason, people failed to properly read and understand the contract that they signed. Next in line is that they bought into loan transactions that were actually not in their best interests. Don’t be a dope, a dupe and a doofus. Read and verify your mortgage contract. It may be the most important thing you ever do in your personal business life other than getting married!!!!!

In the home sales market we are in the throes of what may be the strongest buyer’s market in my lifetime. There are a few things people can do to help their property sell when they are living with a house that must be sold right now. Number one on the list is don’t panic. Bad decisions lead to more bad decisions. Ask yourself if you really have to sell that property right now or if you can somehow refinance it and turn it into a rental unit.

If that is impossible and you are in a position where your job has forced you to move at a bad time work out if you can get some help from your employer. Companies have relocation budgets and are sometimes willing to help out the people who work for them in such a situation. If you are just going to have to bite the bullet and sell do try to prepare a package that will help out your buyer. For instance FHA has a program that can give a buyer the capacity to get into your home with little or nothing down. That can be very attractive right now.

We really do not have an excess of houses in this country so much as we have a home market in a state of constant turmoil. That condition was brought on by some bad lending practices and a lot of folly on the part of people who thought prices had to keep going up forever. This is a market correction. Just like prices had to come down when they went up too far they will eventually go up again when they come down too far.

If you are in danger of foreclosure try anything to avoid it. Besides being an ugly stain on your credit it is a really painful experience based on everything I have seen. Be proactive and work on anything you or anyone who has a little expertise in lending can do to avoid that fate. Consider a short sale if your bank will go along. That may be ugly but can really make it easier for you to find a new home eventually. Do not give up. There are lots of programs that are already in place to help you negotiate your way out of the problem instead of standing by while it happens to you.

Finally use the network of social and private agencies that has started to develop around this problem. You are not alone. There are four to six million homeowners that are facing the same problem over the next three years if the financial papers have it right. This is a major social problem and society is trying to address it. Ask for help and you just may get it.

Finally if you do lose your home do not damage it. Negotiate with the bank for a relocation contract which can give you some cash to relocate and leave your home in good shape. Anger is part of the problem with this whole mess. Anger at losing your home is understandable. But indulging in petty vandalism to get even with the lender who really doesn’t want your home right now is self defeating.