Well, for some reason, maybe because of the invite I sent out to each of the REOPro members about the Five Star Educational Conference, I am getting a slew of questions like, “is it worth it?”, “will I see a return on my investment?” and “will I get a listing by going?”
Let me ask a question of my own……..how would I know?
You see, I can’t tell you if it’s “worth it”, why you ask? Because I don’t know you, I don’t know if you have any experience in default, I don’t know if you are committed to learning, I don’t know if you have any knowledge what so ever about REO so, how can I truly answer that question honestly and with personal integrity?
Let me be very blunt, honest and tactful. If you asked me if it’s “worth it”, I suspect you don’t know anything about Five Star then and therefore, I speculate that rather than going to the “Events” tab, clicking the link to their site and learning what they are all about, you instead, just hit your reply button in email and said, “is it worth it?”, “will I see a return on my investment?” or “will I get a listing by going?”
This makes me mad because, it’s almost as if you want to be spoon fed what I am already making so easily available to you in one spot, here on REOPro! For goodness sake people, before you ask, go look.
Now, so I don’t come off rude, ugly, mean, vicious and arrogant, let me say, those of you who did go and visit their website first, before asking me questions, I was able to tell you did your homework. Thank you, Thank you, Thank you, very, very, very, very, much! I know you did your homework because you asked me questions like, “Is Five Star as influential as they claim”, “Did you get any good contact from Five Star”, “How much business can you accredit Five Star for?” etc…….
My point here is, the nature of the question tells me the commitment and dedication you have to this industry. Even if you didn’t go look for yourself before you asked me, “was it worth it?”, “will I see a return on my investment” or “will I get a listing by going” I was always polite, maybe a bit miffed but, polite and advised you where to go to find information you needed so, don’t get rude, ugly, mean, vicious and arrogant in your replies about how obviously Five Star must not have anything to offer you because I “flipped” you over to go look at some website.
Please understand, I am independent and, I don’t make any money from anyone in regards to this site. So, when I say you might not want to let an opportunity pass you by, then by all means, don’t take my word on it, go figure that out for yourself.
I give you the tools to hear other peoples opinions so, write a blog or start a forum discussion and ask the 800 members here what they think.
P.S. If you don't know who Five Star is or what they do.........but, you asked me, "is it worth it?"..........well, I tell you what, go find out who and what Five Star is first, then ask yourself if you think it's worth it. If then you don't know, then come ask me but, I am going to ask you, "Do you know who and what Five Star is?"
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An article by Jennifer Harmon with www.ManagingREO.com highlights just another reason why I believe that REO’s are not what banks want and that our industry is in the beginning stages of a paradigm shift. Back on October 8, 2008 I wrote a blog titled, “REO’s Become Extinct” which focused on the idea that REO’s just simply cost too much to continue doing and our industry had numerous reasons to change and start doing more Short Sales.
Well, like with any fast growing industry, growing pains with short sales are rampant. Many people complain about short sales and, the list is too long to review here but, we are seeing MLS boards taking steps to force more regulation and in return, the process is smoothing out a little bit.
As I mentioned in my October 8th, blog, we are seeing a surge in Foreclosure Avoidance companies like Titanium Inc. and BSG3. Just so you know, I am an HRC with Titanium and love them, thought I would share that in the spirit of disclosure.
Now, with all that being said, let me get back on task and that is, how are illegal foreclosure claims spurring the growth of these Foreclosure Avoidance Counseling companies and subsequently short sales.
Jennifer Harmon mentions in her article that legal aid groups and the such are trying to sniff out illegal foreclosures and, therefore they are seeing a rise in these types of claims. Simply put, courts, legal aid groups as well as certain law firms are looking to give these homeowners a way of keeping their homes. This isn’t really a bad thing, I am all for a homeowner staying in their home, when they can afford it.
Jennifer’s point is, lenders need to do more homework and work more effectively to ensure that the chain of title is complete, accurate and legal before they decide to foreclose. It’s a great point but, I don’t see that happening. Truth is, 2009 isn’t going to be any better than 2008 unless the government steps in and does something drastic to stop the foreclosure tsunami. In reality these lenders can’t wait for government so, they are taking steps on their own to protect themselves and hence, short sales can do just that.
You see, with a short sale, the bank isn’t selling the home, the homeowner is. All the bank is doing is approving the amount they are willing to take as a loss when it’s sold. In essence, they avoid the foreclosure all together and don’t really need to worry about claims of any illegal foreclosure.
Now I am no Attorney so, I may not aware of some obscure legal principle that makes my argument mute however, it makes a lot of sense to me……lol
In closing, I feel, believe and speculate that REO’s are not the way of the future. I really do believe they will always have a place in our society but, I don’t see the Default Industry surviving this economic downturn looking like it did when we went in. I do think old business standards are changing as we speak and short sales are going to be a preferred way to do business.
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I just got an assignment and went by the property to verify occupancy.I ran across something all of you may enjoy: REVIEW THE PHOTOS!Apparently the back fence fell down and the neighbors livestock came over to graze, (A steer, several sheep and a strange looking goat).The neighbor put his fence back up but left his animals on the property to graze so they've been there for a little over 2 months and appear to have made the place their home.They are being returned by their owner to their native habitat tomorrow.The strange looking goat is definitely NOT a fainting goat. (Check youtube if you do not know what a fainting goat is...)He is however, more skittish than a retarded kitten. (Especially after I scared him to see if he was a fainting goat) I think he knows his main purpose in life is being an entree.The steer is very tame, I've named him Cheeseburger!While I there, he tried to go into the house (the door was closed and he kept butting it).Hopefully, that's not a regular activity for him.He followed me around like a puppy. Unlike the goat, he seems to have no clue of his future...The sheep are as ambivalent as cats living in a crazy old lady's house.They are somewhat curious but prefer their own company to that of large humans.One photo that did not get taken was of the next door neighbor (not the animals owner), who came over to visit, an skinny old man wearing a a black leather biker jacket and sporting 'summer teeth' (some er' there and some ain't).He wasn't interested in having his photo taken, (possibly from fear of being identified by law enforcement or maybe he was just naturally averse to having someone who scares goats take his picture).I love my job!
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Posted by Suzan Nasr on January 21, 2009 at 5:25pm
While we've been seeing our share of REO's throughout South County, to date the number of foreclosures and short sales in Coastal Communities has been very low. Popoular coastal towns such as Laguna Beach, Monarch Beach/Dana Point and Newport Coast for the most part have not been affected much. Ofcourse it remains to be seen what the trend will be in 2009. Once in a while when an REO doest hit the market in one of these communities, it's typicaly sold right away. A 2 bedroom condo in Monarch Beach is still in the mid to high $300k range while in Laguna Niguel you can pick a 2 bedroom in the low $200k range! Yet you are only a few miles from the ocean.www.PacificBankerRealty.comRead more…
Realtors, do not advise your sellers to stop making payments on their monthly mortgage when they are participating in a short sale.
Why, you ask.
Banks consider many things when determining if they will accept a short sale and of those many things they consider, the Seller’s Net is the most important.
Now before I get ahead of myself, understand that in a short sale, the homeowner isn’t walking away after closing with anything other than debt and when I say “Seller” I am specifically talking about the bank and when I say “homeowner” I am talking about the actual person residing in the home or at the very least, is responsible for paying a monthly mortgage on the residence.
Ok, with that being said, back on task. The seller’s net sheet is affected, positively or negatively based on the monthly payments or lack of payments by the homeowner. So, if the homeowner isn’t making monthly payments then the amount of loss the bank incurs increases monthly. Let me assure you, increasing monthly expenses on the part of the bank isn’t going to make it easier for them to accept the short sale. Ultimately, they have a bottom line and granted, they aren’t going to share that with you. Because of falling values chances are you priced your short sale to sale in 30 days or less which most likely means you may very well be at the bottom of the banks bottom line, by the time you get the first accepted offer.
In other words, any additional expense the bank is forced to incur because your homeowner won’t pay, can’t paying or isn’t paying his monthly mortgage, the more likely it’s just more cost effective to simply foreclose.
My advice to you homeowners, pay as much of your monthly mortgage as possible so that you have a better chance to close the sale.
My advice to you Realtors, you better be getting monthly updated pay off statements and sending in monthly revised estimated HUD-1’s otherwise, you may get a nasty surprise the day of closing when the bank refuses to close.
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Ok, because i see several of you double posting as well as posting things incorrectly, let me help with a clarification between a Blog and a Forum.
Think of a Blog as a news article. When you write a blog it should be informative and written in a similar style as an editorial in a news paper.
Think of a Forum as a discussion hub. This is where you can ask a single question or make a general comment and keep a written history of others who comment back.
**Don't forget, when writting a blog, it's vital that you propertly categorize it. "Tag" your blog with search words so that others can find it later through the archives. You can find the "Tag" feature at the bottom of the Entry section of the blog. Keep in mind, blogs written on REOPro are submitted to search engines so, if someone is searching "REO" on google, the higher your blog rank, the more likely it will appear on the first page of the search results. If you want to learn more about that, write me back and let me know.
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Okay,Can someone please shed some light on why land safe appraisers are killing sales with their values? A few years ago aren't these the same group of appraisers countrywide was using to do there loans? I have now had 2 deals go sideways because of values from appraisers (of which both have not been from the local area).As many experienced REO agents know the banks, our clients have an appraisal on file prior to ever listing the property. On one particular home my BPO price was conservative and below both the appraisal and 2nd agent's BPO. However after 4 days on the market this 4400 sq ft home, in what I would consider good condition, located near a golf course community had 3 offers. So we go to escrow with high offer and guess what the lender's appraisal came in 17K below purchase price and 30K below the banks appraisal on file. (If we had these same appraisers’ 2-3years ago we probably wouldn't be in such a mess now RIGHT!!!) At this rate our market will never recover...Looking at the appraisal the appraiser noted this home in average condition.. I'd beg to differ but, I'm not an appraiser. The most alarming thing is the adjustment for a property same age and style in good/superior condition. A $40,000 adjustment seems extreme to me for a home in which no repairs are noted, and was built within the last 5 years. Keep in mind, in the report the appraiser notes no needed repair or deferred maint; however subject property is in average condition. (I will upload pics in a few.) Any comments to help shed some light on this would be great. Has anyone else had similar experiences? I'm sure this deal will be as good as dead and countrywide now B of A can forget about ever writing the loan in this one because the bank is not going to take that hit, In fact they will lend on it before they allow that to happen.Here's my question. Are these the same appraisers countrywide have been using to price their REO's? If so this would explain why countywide is listing their REO's below everyone else and getting multiple offers. Well if this is the case why are they accepting offers over appraised value, better yet why are they lending on them since most countrywide REO are requiring one to be pre-approved with Countrywide? Comments Please..
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Nothing irks my soul more than the Realtor who questions my integrity. Yes, it can be argued that our industry is faced with many challenges, of which, personal integrity could be considered at the top however, I am not the one.
My integrity and reputation precedes me and of this I am much aware. I pride fully admit I have never been good at humility but, we each have our drawbacks.
As I was saying, I am not the one. I got out of my way to ensure everything is on the up and up, not because I am bound by some generic code of ethics or some legal statue but because, that is how I was raised. (cliché I know)
So, when I sent out multiple offer notices to all the Selling Agents on a recent property, I was a bit miffed by the oblivious yet gallant response by one Realtor that went something like, “I don’t believe you have multiple offers.”
Well, in this situation I could have responded many different ways however, reverting back to those wonderful lessons I learned as a child, of which my mothers favorite came to mind, “If you don’t have anything nice to say, don’t say anything at all”. With that in mind, I simply stayed quiet………..(Long Pause) and, then the Selling Agent said, “are you there?”
My reply was yes, I am here, I have been here listening to you. I guess he was shocked that I was listening but, I am sure that is the by-product of most likely never being listened to because he obviously never has anything worth while to say but, that is another story for another time.
I proceeded to end the conversation by saying, “did you have any other questions I can help with?” I was hoping he would say no and hang up but, I wasn’t that lucky.
None the less, the conversation did come to an end, almost just as dramatic as it started. I repeated myself 5 times….I know, 5 times seems a lot but, for some people, that is just the start. For 5 times I said, “I am providing you the opportunity to instruct your client that multiple offers are on the table and they should submit in their final and best offer.”
Eventually, the Selling Agent hung up and, I moved on to my next call. I don’t know how this is going to end but, I assure you, as always, I will be a gentleman and scholar……until he pisses me off.
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Basic knowledge of residential real estate as well as how to deal with bank owned properties is a must. A real estate license, membership to the local real estate association and Multiple Listing Service (MLS). You will also need your own computer—nothing fancy, a Pentium-class system will work fine—with internet access, email and knowledge of Microsoft office/other software. It would also be helpful to have marketing, budgeting and financial management knowledge. Not to be forgotten are strong negotiating skills, time management, lots of patience and ability to work with different personalities. What other skills do you think or have you found necessary?
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Posted by Barb Shewmake on January 10, 2009 at 7:08pm
I just had to tell you all about the day I had today. It began as many Saturday mornings do at my house. My husband is an REO Broker too and almost every weekend, we catch some 'quality' time together driving everywhere and taking BPO Pics, doing property inspections, etc., which we actually look forward to and enjoy (Please, someone, jump in and tell me this is not really as pathetic as it sounds.) Anyway, we grabbed our list of addresses, our camera, and off we went. About 1:30 in the afternoon, we drove by a property in the worst part of town, stopped, snapped 3 pictures and drove away. A block or two away we looked in the rear view mirror and here comes the car that was parked in front of that house speeding up from behind us. We tried to dodge him by zigzagging down a few side streets but we couldn't lose him. We reached the highway and took off. Then this crazy maniac chases us until he catches up with us, first on one side, then the other, then he pulled in front of us and slammed on his brakes, determined to force us to stop. My husband, being the excellent driver that his is, swerved around him and started driving toward the Sherriff's Dept. By this time, I was on the phone with 911, being instructed to pull over and see if he would just go on. I'm like, "Yeah right. He might have a gun. No way we're stopping, this guy's crazy". So we ended up in this lengthy chase, having to cross a bridge to get to the Sherriff's Dept. At one point he must have figured out where we were headed and he took off. Don't know if the police caught up with him yet or not. They have his address :) and license plate, so one would think so. I suppose we will find out more tomorrow. But with more and more desperate people losing their home and/or rental to foreclosure, it's really getting bad out there. I'm definately going to put this incident in my BPO in regard to describing the neighborhood. Anyone else ever have something like this happen? I am beginning to think twice about accepting BPO's in bad neighborhoods for $50.I do have a friend/client who is a parole officer. She goes with me sometimes to do occupancy checks in bad neighborhoods. She says (In California - where they are all taking a cut in pay) many peace officers will gladly accompany agents on occupancy checks for a small fee when they are off duty. Seems worth it to me! Especially after this experience.
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I too went to 5 star and yes it was crazy and yes I dont blame the asset managers for running away and hiding from realtors there. There were thousands of us there and these poor a.m.'s were fighting for their lives. I honestly felt bad for them. I talked to some of them only to just communicate I never once bothered them about business-I was too shocked and bothered by how they were being treated.I heard agents complaining about other agents in their area to asking what a bpo was. If you dont know what a bpo was you paid a lot of money for a conference to find out!However-the overall experience was a good one. I found the networking with other agents more helpful than anything but I did receive a few leads that paid for the conference and then some.Do I think you should attend-yes, if you plan to stay in reos. However, if this is just to past the time until the market goes up. I dont think I would...but I am a Reo lifer now and its just my opinion-
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Have you heard that banks will accept a certain amount of loss on their default real estate portfolios as a rule of thumb across the board?
Have you heard that all banks are willing to take 20% less than the listing price?.
Have you heard that all banks over price their listings because they know they are going to take a less on their properties?
If you believe any of these rumors, urban legends, or false hoods then, you have just been suckered.
Let me explain how banks determine their price when they go to list a home.
First, they order an appraisal as soon as a home goes into foreclosure or as soon as they receive the first offer on the home. In an effort to be clear, let me tell you what an appraisal is. An appraisal is an estimate of your homes Market Value by a professional.
It is important to understand the difference between Market Value and Price. Market Value as defined by the USPAP (Uniform Standard of Professional Appraisal Practices) says, "...a type of value, stated as an opinion, that presumes the transfer of a property (i.e., a right of ownership or a bundle of such rights), as of a certain date, under specific conditions set forth in the definition of the term identified by the appraiser as applicable in an appraisal." So, in other words, it's the opinion of a trained professional as to how much the property should sell for in a fair market.
So, I bet now you are wondering how these appraisers analyze a property in such an un-certain market as that we are in now, right? Well, that can be answered by the definition of Market Value used by the residential mortgage financing industry and it says, " ...the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale." So, in other words, adjustments for any reason, are made to the comparables sales price not the subject property.
Ok, I am sure this may be confusing but let me explain it this way.
You want to put an offer on 1000 Money Pitt Lane but the asking price is $150,000.00, which you think is too high because it's a foreclosure.
Well, the bank isn't going to care if it's a foreclosure, short sale or once belonged to one eyed, one horned flying purple people eaters because, they have comparables, from the appraisal, showing that similar homes that are true comparables, alike in almost (no property is ever the same due to it's uniqueness and immobility) every way sold for or above $150,000.00. So that offer of $115,000.00 you put in thinking that banks are taking less because that is what they do, is foolish and a waste of everyone's time.
Well, maybe the Appraiser was smoking some serious blow that day and you (as the buyer) know that the home just isn't worth $150,000.00 so you want to stand by your offer and have it submitted.
Truth is, the bank isn't just relying on the Appraiser to get the appraisal right. By the time you submitted your offer, they have accumulated approximate 2 appraisals, 1 from the previous homeowner and 1 upon foreclosure, and they have had a Realtor provide a BPO (Broker Price Opinion) monthly for the time before it hit the market and while it was on the market. My point here is, the bank is going to know the value of the home, the monthly average depreciation for the neighborhood and how long they are willing to wait for the "right" offer to come in the door. On average, per my friend at one of America's largest banks, they have 5 price analysis on a home before it is every put on the market so, they know, you can bet on it.
Ok, so now that I have explained that, can you see why thinking a bank doesn't know how much a home is worth is just silly.
Granted, banks are dumping some properties due to the large amounts of real property on their books however, that isn't because they have made some secret policy that they will accept a general loss on all their properties. In reality it's more about that specific home and how much loss they are willing to take and, that isn't something they are advertising.
So, if you come across a great deal, then most likely you were at the right place at the right time with a Realtor who was looking out for you versus, anything else.
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We have recently started seeing some commercial REO and distressed real estate in Las Vegas. Some of the inventory is from SBA or FDIC. Was wondering if anyone is focusing in that market like I am and if they have contacts or product for our investors.
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A recent unbelievable situation I was in has prompted me to write this blog. This is the account of that situation and should be enjoyed for it’s shear entertainment value. I am not bashing anyone, just telling a story. This story is true however, names have been changed to protect the innocent……if any exist.
So, I am working this Short Sale as the Listing Agent and, as I normally do, 2 weeks out I check up with the Selling Agent and make sure everything is on track. As usually, I hear the, “Oh everything is fine” story however, due to my experience in these types of deals, I know better and follow up with my closing agent, Mrs. Super Closer. After speaking with Mrs. Super Closer, come to find out, thing are far from “fine”. The Closing Agent hasn’t received anything from the Buyer’s lender, aka The Package. In fact, she goes on to tell me that they have tried to reach them now for 3 days, ever since I faxed over to them the Release of Contingency, to no avail.
Obviously, I call the Selling Agent back and explain, “Everything isn’t fine” because we are 2 weeks out and my closing agent hasn’t heard anything from the buyer’s lender. Well, he doesn’t seem to have a clue as to what is going on and says, he will call me back when he knows more. I update the notes in my database and schedule a 2nd call back to the Selling Agent in 1 week.
1 week later and I call the Selling Agent back to check the status of the deal. He says “Oh everything is fine”. Well, after reading my notes I promptly call my closing agent, Mrs. Super Closer and she tells me, “The bank is still waiting on the appraisal”. Confused and dismayed I call the Selling Agent back and alert him to the status of his clients loan. He is lost and says he will have to call me back.
I give him only a couple hours and then I call him and ask for the status, he says, “Oh everything is fine”, almost a robotic response at this time. Knowing better I call Mrs. Super Closer and she proceeds to tell me that the buyer’s lender is requesting to extend the closing by a week because the holidays are upon us and they can’t get an appraiser out fast enough.
I immediately call the Selling Agent to brief him on the status of his client’s loan and once again, puzzled and confused he says to me that he will call me back.
At this point, I have no confidence in his abilities and I pull his buyer’s loan approval letter from my file. I call the loan officer and ask, what is going on. The loan officer confirms what Mrs. Super Closer told me and request we post pone closing for 1 week, maybe 2. I explain to the loan officer that this isn’t going to be a possibility and any delay must be approved by my client’s bank (keep in mind this is a short sale) and they aren’t going to budge….I know them well.
I call my client’s bank and as predicted, not a chance under heaven are they extending the closing. Truth is, everyone has known the closing date for more than 30 days now and they felt any delays were just going to cost them more in the long run so, close on the agreed upon date or don’t close at all.
I called the buyer’s lender back and explained the urgency of the situation. He explained that they were simply waiting on the appraisal and, they will not be able to send anyone out till after the holidays, past the closing date.
Well, I had to call my client to brief her that her home may not sell and I felt awful to make this call. I knew her situation and a closed short sale was going to start her family on a more secure financial future for the New Year. After calling her, she explained that a man, identified as an Appraiser came by over a week ago for an hour. I asked her if she had his card and sure enough, she did. I got the appraisers information and called my appointment desk
I verified the man’s identity and that he had a confirmed appointment to my clients house more than a week ago. Completely befuddled by this miraculous turn of event, I immediately call the buyer’s lender back and enlighten him to the fact, his appraiser was out there, more than a week ago and neither his bank, his client (the buyer) or the Selling Agent (the buyer’s agent) was aware that an appraisal has taken place.
Granted, maybe I should have known but, truth of the matter is, as a busy Listing Agent, I don’t have the time to keep up with every visitor to each and every home I list. I especially don’t have the time to ensure Selling Agents are driving their workflows and follow up with their clients as well as their vendors to ensure jobs are getting done.
So the banker calls the appraiser and calls me back directly, just as he said he would, 2 hours later. Come to find out, the appraiser did complete the appraisal, submitted it through his company and his processor didn’t hit the “submit” button in the computer to send it over to the bank. In other words, it all came down to someone not hitting the right button.
The banker tells me that we can close on the originally agreed upon date and it shouldn’t be a problem at all.
By the way, this all came to ahead on Friday afternoon, now it’s Saturday morning, I call Mrs. Super Closer and she tells me that, “Everything is fine” and from her, I know it is.
Saturday afternoon early evening rolls around and I get a call from the Selling Agent. He is begging me to ask my clients bank to extend the closing. I asked him why and he proceeds to tell me his buyer’s bank needs the extra time to get an appraisal done.
Knowing what I know, I tell the Selling Agent, no, the bank will not extend the closing and he best follow up with his client’s banker. Talk about clueless……lol
So, what is the lesson here….too many to name.
FYI: closing took place as originally agreed upon and the Selling Agent was none the wise to what actually took place.
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A fixture is Personal Property that has been so affixed to land or a building that by law, it becomes part of the real property. (Modern Real Estate Practice 17 Edition)
To help you understand this a bit better, let me give you some examples of what a "fixture" is.....
•1. Heating and cooling system.
•2. Kitchen cabinets.
•3. Built in entertainment cabinetry or built in electronic systems.
•4. Anything that has been added as a permanent part of the building is considered a fixture.
To help you determine if personal property is a fixture a simple test can be done to determine the intent, they are.......
•1. Method of Annexation: Was the Personal Property installed in such away that it was meant to be permanent. Just ask, "Can we remove the Personal Property without damaging the surrounding property?" If the answer is No, then most likely, it is a fixture and should be conveyed with the property.
•2. Adaptation to real estate: How is the Personal Property being used? A great example is your refrigerator. Many would consider this item as Personal Property however, that wouldn't be the case if the refrigerator was designed to un-questionably match the cabinets. In many high end homes, the appliances are styled in such a way that they hide and appear as part of the actual cabinets.
•3. Agreement: What did the parties involved agree to? What was stated in the Purchase and Sale Agreement as to what would and would not convey. If you ever have a question that something is or isn't a fixture.....it's always important to list it out in the Purchase and Sale Agreement if you want to ensure you get it.
The ultimate lesson here is Test 1 (Method of Annexation) and Test 2 (Adaptation to real estate) is subjective at best. I can say that with confidence because the truth of the matter is that courts have been very inconsistent with their rulings. Most of the time, they rely on Test 3 (Agreement), I can't stress how important it is, if you want it, you better include it in the Purchase and Sale Agreement.
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Posted by Steve Elmore on December 26, 2008 at 3:55pm
Hope everyone had a Merry Christmas! 2009 is right around the corner!! We should all hit the ground running - get in the game. As it has been said before, we can't control the market, but we can control our participation in the market that is there.Have a Great New Year!!
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I am sick and tired of hearing about all these companies who are wanting a Bailout, Rescue Bill or Bridge Loan. The big three auto makers come to mind.
For many requesting government funding, including the big 3, the basis of their ignorant argument is that, they are simply to big to fail. It would be disastrous to our national economy because they have so many vendors and business partners that could go under with them.
Granted, yes, many would perish to the economic devil of bankruptcy which is a reflection of their own poor decision making, ie….high legacy cost, poor quality, inability to compete effectively with it’s competition and lack of consumer confidence and lack of desire in their product but, what business could make money with these factors against them, just to name a few?
So, instead of proceeding with bankruptcy and restructuring so that they can come out lean, mean, fighting machines, they want to run to Uncle Sam for a Bailout, Rescue Bill or Bridge Loan, which by the way, they can’t get from a BANK because the banks are smart enough to look at them and say, “No way Jose”. This Bailout, Rescue Bill or Bridge Loan does nothing to make them restructure, it just keeps them floating so they can get through the economic storm.
Back to the argument at hand, “We are too big to fail, our failure would worsen the economic downturn the economy is going through.” Well, bah hum bug….I say. This is like putting a band aid on a compound fracture, only short of a reset….it isn’t going to work.
Now, with that being said, let’s talk about the largest part of the US economy that failed and never asked for a Bailout, Rescue Bill or Bridge Loan and that is the housing industry. I don’t remember some housing executive setting in front of a panel of Senators asking for money to help Realtors, builders, nail gun manufacturers, steel toe boot makers, office equipment retailers, and any and all other effected industries when the housing bubble busted.
No instead we got inquiry hearings as to why Fannie Mae and Freddie Mac failed. We got no relief….and, I mean no relief for struggling homeowners, we got a black eye and bad reputation for “allowing” this to happen. We are looked upon as the creator of our own demise yet, we are the largest, by far, part of this countries economy and yet, where is our Bailout, Rescue Bill or Bridge Loan? WHERE IS IT?
We didn’t get anything because we were too big to help!
So, I dare anyone to bring to me a educated argument as to why we should bailout the Big 3, or anyone else for that matter, before we start bailing out the homeowners and the housing industry. How many partner business’s failed or had to lay people off when we were struggling. Think of all the Home Builders, Home Inspectors, Home Appraisers, Home Lenders, Property Managers, Brokerages, Realtors, Plumbers, Electricians, Roofers, Construction Manufacturers, Office Supply companies and whoever else failed because we didn’t get a Bailout, Rescue Bill or Bridge Loan.
More importantly……..THINK OF ALL THE HOMEOWNERS THAT ARE STILL WAITING.
Maybe if we put all the homeowners in private jets and send them up to Washington to stay in fancy swanky hotels and then dress them up in thousand dollar suits with exotic thousand dollar brief cases, then they might be able to get a Bailout, Rescue Bill or Bridge Loan.
Like I said earlier, maybe we are just too big to help.
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