They followed the rules … now where do they go?

We are working with clients that need a home. There is nothing unusual about that fact. That is what we do for a living. Usually, we gather the data…you know how many bedrooms and bathrooms they need…when they plan to move and why they are moving.

In the past, having the data was sufficient. We could go to the MLS and begin searching for listings that met their criteria. If they were buying, we would verify (as best as possible) that they could qualify or had been pre-approved for a loan. If they were renting, we would ask directly about their credit history and rental history.

Something old in volumes quite new has changed the landscape

People that bought a home during the real estate boom have increasingly found themselves upside down or in a mortgage that has reset and become impossible to pay. These are not all bad people. These are not people that were trying to take advantage of the market. These are your neighbors and mine. These are the people you see in Starbucks and at the subway stop. These are a cross section of Americans in every walk and way of life.

“What to do?” has been the question that has had more than one answer. The Federal Government has issued proclamation after proclamation that they are working on the problem. The have offered incentives to banks that are willing to work with people in trouble. The banks have their own set of rules, that appear from afar created only to maximize their gain and negate potential losses. Banks will not work with customers in trouble until the customer falls behind. Banks will not begin working with a short sale, until there is a contract. It is obvious to all of us that have to work in this quagmire that something is terribly wrong.

If you follow “the rules” , things will eventually work themselves out. Really…. here is the truth. The system does not work and everything being shared is essentially…

You see, if the family stays in the home and stops paying the mortgage and attempts a short sale…they are screwed. It is their credit that takes the hit. They remain in the home, while some half baked agent guesses at a sale price and hopes it is close to what the lien holder will accept. While the process plods along, the homeowner thinks they are doing the right thing. They do not realize that once the house is sold, they will have few choices about where they can move. Thoughts of schools, neighborhoods, commute time and any other consideration will have to fall by the wayside. Their only hope will be to find someone willing to accept them as a tenant with the short sale ding on their credit.

We have had several of these clients. We have shown homes and written applications and submitted paperwork with a letter explaining the situation. We have traversed one end of the county to another. Applications submitted, applications denied. We have notice that the co-op on rentals varies from 25% to 50% of one month’s rent. It explains why other agents are so ready to pass on showing rentals.

There is so much more to share about the seedy side of the housing crisis, but Lourdes and I have to go out and see if we can not find one more needle in a haystack.

If you are looking to rent or buy a home, we would love to help you as well. Contact us at 301-509-5111 or visit our website by clicking this link


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