Forgive me if I keep hearing a voice in my head scream….”Down goes Frazier”
What impact will this have on the roller coaster real estate market? There are some that immediately began scowering public records to identify which homes listed as a short sale are in the Bear Stearns portfolio. The reasoning being that if the home is listed as a short sale at $300,000, JP Morgan Chase might accept much less. Makes logical sense to me.
If Bear Stearns was sold for roughly 10 cents on a dollar, that would indicate that the outstanding mortgage was purchased for about 10% of the face value of the loan. It would seem plausible that an offer equal to 50%-60% of the face value would yield an immediate profit for JP Morgan Chase. (My basic simple math says that if I sell something that cost me 10 cents for 50 or 60 cents, even after cost of sale, I make a nice profit) They certainly are not licquid enough to just sit on the shaky loans. They do have to pay back the money they borrowed to complete the deal. They will realize an enormous profit from the stable loans they purchased.
I had a different thought. After all, I make a reasonably good living as an agent dealing with non-distressed properties. I go on short sale appointments. I make sure the potential clients fill out the necessary paper work. If I take the listing, I make sure that it is noted that the sale will require 3rd party approval. It will take time. This is not an ice cream cone that is being offered.
People that have Bear Stearns as a mortgage holder just moved into a new classification. Why should investors and those seeking to profit off the misfortune of others be the only ones to benefit from this deal? There may be a silver lining to this cloud for the home owner in peril.
If your mortgage is held by Bear Stearns and you can not continue making payments and are considering a short sale, STOP. Your dear Uncle Sam has financed a deal that may have a hidden benefit for you. Your mortage might only be worth about 10% of what you owe. Your friends at Bear Stearns and those that invested there have given you an spring surprise. Get on the phone with whomever is now handling the mortgage. If you are in the midst of a foreclosure, contact the courts and ask them who is foreclosing, now that your lender has been purchased. For whatever reason, the stars are aligned………get proactive.
You may find that instead of this result………..
You will actually find someone in a better position to help you. No promises, but it beats packing all your belongings and leaving your home.
Talk to somebody. Offer to sit down and be evaluated. Maybe you can qualify for a refinance at a much lower principle amount. Maybe JP Morgan Chase will decide it is easier to refinance you at a lower rate and take the windfall profit from the refin and move on. There is this fancy finance category of “non-performing asset”. If you have failed to pay according to terms your loan may be there. It is much prettier to the mortgage holder if you move to the “performing asset” category.
The potential for many homeowners has gotten a bit brighter. You see, if a stranger can go to JP Morgan Chase and cut a deal at 50%-60% of the face value of your loan, you should have the same opportunity. After all, despite your setbacks, despite mistakes that may have been made, despite all the history, it is your home.
I think you should have the opportunity to keep it.
I have no doubt that naysayers will rise from the ashes like some bad impression of the Phoenix. I also believe that any solution a homeowner can achieve to this wide spread problem is better than throwing up their hands and walking away.