Archive for July, 2010

Is it Time to Reform Fannie Mae and Freddie Mac?

Fannie Mae was created in response to the Great Depression when the economy made it difficult for homeowners to meet mortgage terms. Fannie Mae purchased and securitized FHA and VA mortgages to inject liquidity into the mortgage market.

The problem we are faced with today is not that different from the Great Depression with one exception and that is the amount of debt both Fannie Mae and Freddie Mac own.

Together, Fannie Mae and Freddie Mac own more than $5 trillion U.S.  mortgages which is almost half of the total  $12 U.S. mortgages.

 The amount of debt Fannie Mae and Freddie Mac own is not sustainable for the Federal Government, the U.S. economy, or individual tax payers.

That is why the Financial Regulation Bill did not discuss reforming Fannie Mae and Freddie Mac at this time.

 In the near future, we will need to address reforming Fannie Mae and Freddie Mac.  But how do we do this.

In my opinion, we need to have a healthy secondary mortgage market. One that is assuming limited risk to investors.

We need money to flow from Banks to homeowners, from Investors to Banks back to homeowners again.

I think this can be done without the government involved.

We just need better oversight and confidence in our rating system so investors can purchase mortgage backed securities based on the merit of the mortgage itself not in the bubble of the housing market.

Written by Jack Lewitz | Discussion: No Comments »

FRIENDS AND NEIGHBORS

 Last night I watched  Friends and Neighbors  with Ann Curry of MSNBC Dateline. I was saddened by how many people in SE Ohio are homeless and barely surviving.

The number of people loosing their homes is staggering and the numbers keep growing everyday.

I say we need to come up with a different plan a different strategy that thinks outside the box.

I say nobody should be homeless when there vacant homes in foreclosure needing families to live in them.

 I think the banks should not only let people move into these foreclosed homes but they should also pay them to live there.

These people need jobs and there are plenty of odd jobs to go around when dealing with foreclosed homes. Pay these people to mow the lawn, take out the garbage, fix up the homes, and preserve the asset for the bank.

Lets solve this problem together.

Written by Jack Lewitz | Discussion: No Comments »

WHERE HAVE ALL THE SELLERS GONE

 

Inspired by words and music of Pete Seeger.

 

Where have all the sellers gone?

Long time passing

Where have all the sellers gone

Long time ago.

 

Where have all the buyers gone?

Investors have picked the good ones everywhere

When will they ever learn?

When will they ever learn?

 

Where have all the builders gone?

Long time passing

Where have all the builders gone

Long time ago

 

Where have all the bankers gone?

Long time passing.

Where have all the bankers gone?

Gone to graveyards everyone

When will they ever learn?

When will they ever learn?

 

Where has all the money gone?

Long time passing

Where has all the money gone?

Long time ago.

Will we ever learn?

Will we ever learn

Written by Jack Lewitz | Discussion: No Comments »

There Will Be More Strategic Defaults in the Future

I predict strategic defaults are going to be the next wave of foreclosures.

 It was reported that the financial markets will not recover for another 3 to 7 years.

As I see it Real Estate is the last to recover.  I predict it will take 7 to 10 years before Housing will recover.

Why would anyone want to hold onto real estate for that long and continue to take a loss each year?

The argument of “what is the right and ethical thing to do”  is no longer  a valid argument.

 I say the proper thing for people to do is ask themselves “should I continue to throw good money after bad money” or ” should I just pull out and take the loss now” ?

 These Economic decisions are beginning to out way ethical or moral decisions and this is why I say we are going to see more strategic defaults.

Many people bought second homes, investment properties and these so called investments are now liabilities instead of assets.

Soon people will learn that true wealth is not measured by what one owns rather how one lives and saves.

A home can be a necessity or an  asset when it is paid off in full or it can be a liability and long term debt.

“The Richest Man in Babylon” did not become the wealthest man in his day by spending more than he earned.

Written by Jack Lewitz | Discussion: No Comments »

In The End Everyone Looses when Short Sales are Denied.

One of my short sales was denied by the bank. The reason was not because I did not have an offer because I did.

 But let me start this story from the beginning not the end.

 It was July of 2009 that I met with the seller. She purchased 3 condos with an Option Arm loan and paid $170,000 for each unit. The last unit sold in the building was $29,000 and this was a 2 bedroom/1 bath foreclosure sale just like my sellers unit.

I had the unit listed for sale at  $50,000 and the “Highest and Best” offer was $35,000 cash offer. The unit was listed for 340 days and was seen by 337,000 people on Realtor.com. This really was my best offer.

Chase Bank was the servicer of the Loan while BOA was the investor. In the end Chase bank would not submit our Cash offer to the Lender because they said it was too late and the file was too old.

Poor Excuse. In the end everyone looses.

  • The Bank looses because any offer in the future will be less than what they received today.
  • The Seller looses because they end up with a foreclosure on their record.
  • The Buyer looses because he does not end up buying something they want.
  • The Tenant looses because he has been paying rent and now is being forced to move even though he did nothing wrong.

 I am starting to think both Chase and BOA are doing nothing but C-T-A (Covering their Asses) when it comes to the current real estate market.

We need to change that soon.

Written by Jack Lewitz | Discussion: No Comments »

Call Me Today
708-309-5334


Copyright © 2008 IL Real Estate Specialists     Log in     Design by Real Estate Tomato     Powered by Tomato Blogs
nu frontiers Admin Login