Register Real Estate Advisors

Kevin Price, host of Price of Business, and I discuss the relatively new phenomena of banks walking away from foreclosures and what this means to the homeowner. This aired on AM 1070 in Houston on Thursday.

Since the Texas Attorney General called for a foreclosure freeze I have been getting a lot of calls with questions about what is going to happen in our real estate market.  It was already scary with appraisal issues, a flood of distressed properties on the market, interest rates at all time lows, gold at all time highs, tax credits ending, and now this.  This is not a normal blog post for me.  It is lengthy and I hope you will hang with me because if you have anything to do with short sales or mortgage foreclosures this is all information that you need to know.

Know that Texas is not alone.  Other states are taking similar action.  Maryland’s Governor is supporting a 60 day moratorium on foreclosures there.  Delaware is reviewing pending foreclosures and in Massachusetts. The attorney general said her office is investigating “an apparent failure of major creditors to follow state foreclosure law.”

So what exactly is going on?  First, I want you to know I am getting my information from several sources – The National Assoc. of Realtors, The Texas Association of Realtors, The Associated Press, and the Real Estate Research Center at Texas A&M University.
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NEW YORK (New York Times) – April 5th will mark the beginning of a new program by the Obama administration intended to end the foreclosure crisis — one that will pay homeowners to sell their homes.
The program will allow owners to sell their homes for less than they owe and give them cash to expedite the process.
Hundreds of thousands of delinquent borrowers will be encouraged to sell their houses through short sales, in which properties are sold for less than the balance of the mortgage.
The new program will give the servicing bank $1,000, and another $1,000 may go toward a second loan, if one exists. The distressed homeowners will also receive $1,500 in relocation assistance.
Borrowers could suffer less damage to their credit ratings under the new program, and they will receive the lender’s assurance that they will not later be sued for an unpaid mortgage balance.