Darrell Blomberg

A well prepared credit counselor may be able to negotiate a reasonable cash settlement (10-20%) that also removes the black mark from the prospective buyer's credit report. It is worth a try. Lots of people are getting great settlements with the economy in disarray.

Michael, Thank you for your observations. You allege that it took twenty years because Japan was in denial about their situation? Well, back in the US, the numbers for pending troubled loans is more known than you realize. What is unknown is when the loan servicers, mortgage insurance companies, loan investors, REALTORS® and the federal government are going to figure out the answer. Bite hard, you won’t like my answer. I’ll make the case that the government should step in. Currently, we have too many foreclosures, bloated MLS inventories, declining prices, scared sellers, apprehensive buyers, parallelized loan servicers, angry loan investors, frustrated REALTORS®, an impotent government, a stagnant economy and job losses; which leads, again, to more foreclosures. Where should we break this economic death spiral? We need to break it before someone gets in the spiral. Our most diligent focus needs to be keeping good people in their home and giving them a good reason to stay there. That would break the cycle before a home goes to the auction block. That would yield one less foreclosure, one less short sale listed in the mls, one less…, etc. A well structured loan modification that probably involves some degree of principle reduction is just the ticket to get us out of this mess. There are probably worthy homeowners living in 30% of properties which are in some stage of foreclosure. These are good Americans who experienced a temporary hardship. They may be so upside down in their home, when you consider; loan balance, loan associated arrearages, loan amortization, current market value and future appreciation, that they cant possibly reach the break even point for 7 to 15 years. That means, we’ll have homeowners doing short sales for more than ten years. Is that the program you’re espousing? If this is true for the homeowner, doesn’t it make financial sense to walk from the home if their credit has already tanked? They may be better off to go find a rental for a few years while working on their credit repair. The solution is finding a way to stem the tide of foreclosures where good solid citizens have experienced a temporary hardship and don’t have the economic heft to get back on track without assistance. According to James B. Lockhart III (Director (CEO) and Chairman of the Oversight Board of the Federal Housing Finance Agency) the government looses 50% of the loan balance when they tally the all costs to process a foreclosure. A loan modification involving a principal reduction may only need a 5 or 10% infusion of cash. As a taxpayer which investment gets you closer to the solution quicker and for less money? Your desire for Laise Faire will only serve to prolong the process. The government needs to step in and do what it is supposed to. Their purview is to do for the people of America can’t do for themselves; and that is to hustle this mess to a close. Everybody is worried about someone else getting a benefit they aren’t getting themselves. Look closer at who really is getting the benefit of a modified loan for a homeowner. Would you benefit if your house’s value wasn’t weighed down by one more abandoned, rundown foreclosure in your neighborhood? Would your real estate prices stop plummeting? Would there be less unsalable inventory in the MLS? Wouldn’t it be better for your business and the country in the long run? Would we get back to a healthy market quicker? America needs the government’s intervention. Darrell Blomberg, AzTech Realty, Phoenix, AZ