Archive for July, 2011
In today’s New York Times article, “Big U.S. banks to relieve borrowers“, David Streitfeld reports on the new mortgage relief effort being waged to help homeowners at “possible” risk of foreclosure due to a specific type of risky Option ARM loans originated in 2008 and 2009. The article goes on to say that having an option ARM loan seems to qualify the borrower for special help.
Chase and BofA inherited huge portfolios of these loans from Washington Mutual and Countrywide Financial. The article explains how restructuring these loan balances by 50% by forgiving debt will allow hundreds of thousands to stay in their homes. Thank you Chase and BoA!
What the article doesn’t point out is the NEW opportunity for the REALTOR®. With 50% debt forgiveness, sellers are now able to list their properties at appraised values presenting the REALTOR® with a viable new market. The article says that economist, Sam Khater agrees that “Reducing negative equity would spark a housing recovery”.
As demonstrated in the article, a Miami condo owner, Ms. Giosmas, had an Option ARM loan balance of $300,000. She was able to make her payments, didn’t see herself as “at risk” and was surprised to receive a letter in the mail announcing her good fortune. After reducing her loan balance to $150,000, she was able to sell her condo for $170,000. Not only could she sell her condo, but Ms. Giosmas made a small profit. Let me repeat…PROFIT!!!
If I was a broker or REALTOR®, I’d be checking into these Option ARM loans. I’d speak with Chase and BofA. I’d speak with appraisers. I’d advertise in my local community. I’d host seminars on Option ARM loans. I’d discover an untapped source of salable listings. I’d be at the top of my game!Read Full Post | Make a Comment ( None so far )