Geithner Offers Irrelevant Solution to Coming Commercial Real Estate Crisis

[...] Geithner Offers Irrelevant Solution to Coming Commercial Real … [...]

[...] Geithner Offers Irrelevant Solution to Coming Commercial Real Estate Crisis « The Washington I… [...]

[...] Geithner Offers Irrelevant Solution to Coming Commercial Real … [...]

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This post was mentioned on Twitter by megancarpentier: RT @TWI_news: Geithner Offers Irrelevant Solution to Coming Commercial Real Estate Crisis http://bit.ly/awfhFS...

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[...] post: Geithner Offers Irrelevant Solution to Coming Commercial Real … Posted in Commercial | Tags: and-since, cknowledge-the-problem, cnbc, Commercial, [...]

It''s about time that Geithner and Warren realize that this is not just some problem that can be easily fixed but something that will plague our nation for the next few years. The retail and office sectors will be feeling the biggest drop in the next few years as online retailers emerge and more outsourcing occurs respectively. Smaller banks need to realize that the FDIC will shut them down if they don't have the proper capitalization requirements. We speak about this more on our blog: http://www.commercialnotebrokers.com/blog/

The history books should be , as the history was. Not twisted as the liberals wanted them to be,. Do not tell children lies.

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[...] Geithner Offers Irrelevant Solution to Coming Commercial Real … [...]

[...] Megan Carpentier at The Washington Independent: Elizabeth Warren warned in February that commercial real estate was the next recovery-killer, and since nothing improved by March, Tim Geithner yesterday took to CNBC to acknowledge the problem with commercial real estate and push the administration’s program to incentivize small banks to lend to small businesses as the solution. [...]

[...] Geithner Offers Irrelevant Solution to Coming Commercial Real Estate Crisis The Washington Independent – Mar 30th – 11:42 [...]

[...] Geithner Offers Irrelevant Solution to Coming Commercial Real Estate Crisis – By MEGAN CARPENTIER – Elizabeth Warren warned in February that commercial real estate was the next recovery-killer, and since nothing improved by March, Tim Geithner yesterday took to CNBC to acknowledge the problem with commercial real estate and push the administration’s program to incentivize small banks to lend to small businesses as the solution. … He did not clarify how giving money to some banks for an entirely unrelated purpose would solve a commercial real estate crisis. … -   Washington Independent [...]

[...] Geithner Offers Irrelevant Solution to Coming Commercial Real … [...]

[...] by Congress, would use Tarp money repaid by banks, which now has reached about $176 billion. As Megan Carpentier notes, this is a completely irrelevant solution. How $30 billion sprinkled around community banks [...]

The Problem:
Homes are being sold after foreclosure or short sale far below actual market
value. These homes are flooding the market, which has been driving down market
value of surrounding properties for the past five years.

The Solution:
“Sell” the house to the current owner at current market value instead of
foreclosing. Erase the original mortgage and start a new mortgage at the current
market value ONLY IF the current owner agrees not to sell the property within
five years. The new loan would be contingent on agreeing to paying back the
original mortgage to the company if the owner sells the house before the five
year period ended.

Mortgage companies would be receiving the same amount in monthly payments from
the current owner as they would from a new buyer – what’s the difference who
makes the payments? It’s going to be sold for a reduced price anyway, so why not
“sell” it to the current owner if they can afford the new payments based on
current value.

Everybody Wins:
Mortgage companies would save money by not having pay for the foreclosure
process, not having to pay property taxes during the foreclosure process, not
having to pay the staff that is needed to manage all the distressed properties
the mortgage company has, not having to pay real estate commissions, and not
having to sell a home that, on many occasions, has been damaged by the former
owner. Also, it would not be months before the property is actually sold, and
instead, the mortgage companies would be receiving monthly payments towards a
new loan, instead of nothing on the original loan. The property would continue
to be maintained, instead of deteriorating bringing down the value of
neighborhood homes. Mortgage companies will continue to receive the exact
same mortgage
payments that they would receive if they sold the home to another person. Owners
of real estate would keep their homes for a minimum of five more years. This
would greatly decrease the real estate inventory of short sales and
foreclosures, helping to start the return of a normal real estate market. The
economy would begin to recover.

Russ Eppen, Realtor
Broker/Salesperson

Solving the Real Estate Crisis

The Facts: Many real estate loans that were granted to those who bought houses in the United States since 2002 are being wiped off the books, as many of these homes are being foreclosed upon, or the mortgage company is allowing the home owner to enter into a short sale, which also wipes the loan off the books. Every time a house is sold in a distressed circumstance, we are not only punishing the owner of the house, but we are also punishing the economy of the United States.

The Problem:
Homes are being sold after foreclosure or short sale far below actual market value. These homes are flooding the market, which has been driving down market value of surrounding properties for the past five years.

The Solution:
“Sell” the house to the current owner at current market value instead of placing the property into foreclosure, or selling the home as a “short sale”.
Erase the original mortgage and start a new mortgage at the current market value ONLY IF the current owner agrees not to sell the property within five years. The new loan would be contingent on current owner agreeing to pay the original mortgage in full to the company if the owner sells the house prior to the five year period ending.

Current owners must meet the following criteria to be eligible:
Must be their primary residence
Must have purchased the property after 2002
Must not have refinanced for a higher amount of their original mortgage
Must have had a hardship such as loss of income, illness, spouse deceased, etc.
Must be able to qualify under current mortgage company guidelines

Mortgage companies would be receiving the same amount in monthly payments from the current owner as they would from a new buyer – what’s the difference who makes the payments? The property is going to be sold for a reduced price anyway, so why not “sell” it to the current owner if they can afford the new payments based on current value. Furthermore, the original loan granted to the home owner is going to be taken off the mortgage company’s books anyway, so why not let the original home owner keep their house thorough this type of “home loan modification”?

Everybody Wins:
Mortgage companies would save money by not having to pay for the foreclosure process, not having to pay property taxes during the foreclosure process, not having to pay the staff that is needed to manage the huge amount of distressed properties the mortgage company has, not having to pay real estate commissions when the property is sold after foreclosure, and not having to sell a home that, on many occasions, has been damaged by the former owners. Also, it would not be months before the VACANT property is actually sold, and instead, the mortgage company would be receiving regular monthly payments towards a new loan, instead of nothing on the original loan.

The property would continue to be maintained, instead of deteriorating, which brings down the value of neighborhood homes. Mortgage companies will receive the exact same mortgage payments that they would receive if they sold the home to another person. Owners of real estate would keep their homes for a minimum of five more years.

This would greatly decrease the real estate inventory of short sales and foreclosures, helping to start the return of a normal real estate market. The economy would begin to recover because the strength of our economy is directly related to the real estate market.

Russ Eppen, Realtor russeppen@charter.net
Broker/Salesperson 775-219-9255
Coldwell Banker Best Sellers, Dayton NV 89403