Archive for July, 2012

Realtors favor anything which generates a commission and oppose anything which fails to irrespective of whether or not this is good for buyers, sellers, or the market. For example, realtors recently lobbied against allowing bulk sales of foreclosures to private equity firms. Why? Because those sales eliminate MLS sales which would generate commissions. There is no other reason. When it comes to short sales versus strategic default, I am indifferent. For loan owners who would benefit from reduced debt, either option solves their problems. I recently noted that strategic short sales are the moral alternative to strategic default. Perhaps the moral and ethical considerations matter most to some borrowers. The threat of strategic default is the only leverage a loan…[READ MORE]

Our real property system functioned well for centuries with very little change. Prior to the housing bubble, it was widely accepted that people borrowed money to buy houses and if they didn't pay it back according to the terms of the promissory note, the mortgage agreement allowed the lender to call an auction to get their money back. Housing was an earned reward, not an entitlement. The basic dilemma is simple, most people don't have the cash to buy a house, and it would take them most of their adult lives to save for one, so lenders designed loan programs to allow people to occupy and "own" a house while they were working and earning to pay for it. Without…[READ MORE]

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