The Inside Buzzzzzz “LIKE VULTURES FLYING LAZY CIRCLES” . . . .
By Tony Evans
Many years as a mortgage banking consultant and author of a book on manufactured home financing should qualify me to offer information, suggestions, ideas and solutions to the problems we face today. If not, please – no criticism, I’m very sensitive. (just kidding)
In 2006 through the middle of 2007 nobody ever thought the balloon would go up, and we would find ourselves in the bind of the century – in terms of foreclosures, bad borrower judgment, shady lenders, government printing more money, stock prices dropping like a rock, over borrowing by many, and what’s left of your personal economy being flushed down the toilet by the Fed and big spending in Washington.
Today, if you look up at the sky in some states like California, Nevada and Florida, and places in between, you can spot vultures flying lazy circles over vacant existing homes and condos, large tracts of unfinished homes, and U-Hauls packed and ready to go with the keys already mailed to the lender with a note saying: See ya!
You don’t need a crystal ball to know that it’s going to get worse before it gets better, and the picture gets dimmer when the CEO of News Corp., Rupert Murdoch, finally admitted, after months of telling us everything was okay, that he has become “more pessimistic” about the way things are shaping up in the economy. He also added that Fox TV advertising is down 5%. Really, Rupert? Thanks for the late warning.
Of course, the big shocker was N. Y. Gov Spitzer getting his “pink-slip” probably thinking, “Gee, I didn’t know she was that kind of girl. Is cash okay, honey?”
Anyway, (many of) you have “cut-the-cord” to your lender and your migraine now becomes their problem. Maybe they have threatened you about how your credit rating has been destroyed, and you will never, ever, be able to get a home loan again — then told you that your future chances of ever buying even a car, was in that balloon that’s now five miles high in the sky or has burst. The lender that has regained full ownership of the house where you were upside down has probably been in touch with a company called Safeguard Properties. These guys send out a crew to change the locks, cut the grass, mend the fence, and board up the windows. Safeguard also picks up $600 to $1,200 from the lender on each house to watch over things until it’s sold. $$$$$$$$
If you’re not only out of your house, but short on income you might consider jumping on this cool idea and contact some lenders in your town that may have a bucket full of foreclosures. Cut Safeguard out of the picture, and make a few bucks yourself. How hard can it be to mow lawns and nail boards over windows! Simple math dictates that if you handled four homes and the lender paid you just $1,000 each…well, you don’t need a financial consultant to figure that one out.
A lender in San Diego, CA – one of the hardest hit areas in the Golden State (along with Stockton and Sacramento) – had his loan office, Residential Capital, send all of his delinquent borrowers a $5 dollar Starbucks gift certificate. To further insult everyone’s intelligence they included a couple pages of informative documents telling them how his office could help them get back on the straight and narrow, and avoid foreclosure.
What? Residential, didn’t say how many mail-outs were made, but indicated the response was tepid at best – about 10%. Most borrowers probably took them up on the deal, got a 4 buck latte with whipped cream on top, four quarters back, and trashed the loan info.
But let me get back to that credit situation your friendly neighborhood lender said was going to bury you. Not so much, friends. Your credit rating may have taken a large”hit” with a foreclosure on the page, but if that’s the only “ding” on the report, and all your credit cards and car/boat payments are up-to-date with NO 30, 60 or 90 day late payments, things are not as bad as you may think. Try and keep it that way.
In the next column, I’ll toss those of you who think there is NO light at the end of the tunnel, a lifesaver, no, not the candy kind and give you new ammunition on how to get back in the game without much cash out-of-pocket. Meanwhile, rent a nice place or move your family into a mobile home park on a temporary basis, and look for more of the Inside Buzzzzz.