By Scott D. Coloney
As a Realtor and founder of Florida’s first Foreclosure Response Team, I stand on the front lines when dealing with the current circumstances surrounding the real estate industry, and like so many of us, am waiting to see just how the government is going to handle restoring our economy.
To the average American, understanding the intricacies of the nation’s rapidly plummeting property values and gross overabundance of distressed properties plaguing our country is downright exhausting.
To simplify, during the “real estate boom,” a countless number of these distressed properties were overvalued, in some areas up to 200 percent higher than their actual value. This overvaluation has since left it impossible for some people to afford their mortgages or sell their homes.
Through the reluctant approval of the $700 billion bailout plan, Congress is working tirelessly to rectify a complex situation with absolutely no certainties.
Effects on Real Estate
The events surrounding the bailout are confusing people more than anything. For example, the Foreclosure Response Team was recently helping a distressed homeowner who was behind on mortgage payments short sale her property as an alternative to going into foreclosure and potential bankruptcy. The day before the closing, she decided to cancel the short sale offer because she felt adamant that if she held off, the government would bail her out and she would be able to keep living in a home she could not afford.
Due to all of the speculation about how the government can “save” everyone in foreclosure by paying off their loans, which is not even close to the reality of the situation, she missed the opportunity to recover from a financial disaster and her property will most likely be foreclosed on. Hence, people in distress are confused by this mess and it is making it harder for them to make common sense decisions.
A Look at Now and Foresight Into Later
During the real estate boom, the demand for housing was high because almost anyone could get a loan for over a quarter-million dollars, which was clearly insane. As a result of home values rising at such an unsustainable pace, the market finally started to correct itself. Americans now have a hard road ahead of them for the next five years and many will face bankruptcy.
Through the short sale of a pre-foreclosure property, the Foreclosure Response Team is trying to prevent bankruptcy. Short sale systems are needed more than ever in an effort to accomplish two main things. The first is to get needed funds back to the banks by recouping something for the mortgage, rather than dealing with the liability of becoming homeowners with a bad asset on their books. Secondly, they are necessary to clear out all of the foreclosed inventory that exists, otherwise, the economy will never really start to grow.
Homes have been given to people who cannot afford them. And, until something is done about correcting this particular problem, there is no bailout plan that will help. The government needs to spend correctly and purchase bad assets, and Realtors need to help sell off the properties that the banks over lent on.
Realtors and a Solution
Realtors are part of the answer, but are not the whole solution. We all need to unite together and utilize professional resources that will help expedite the sale of residential properties facing foreclosure through short sale transactions.
If this was a war, Realtors would be considered the infantry or the army. Right now, they are fighting a war without the proper tools or systems in place. The Foreclosure Response Team is made up of veteran real estate professionals in the areas of legal, finance, sales and credit, and are leading the charge and uniting Realtors through its broker/agent affiliate program, by providing the systems, tools and support needed to fight this war on foreclosure.
As Realtors, we can make a difference in the country by helping to sell these homes through short sales. By forming a strong global network, we can help America through these tough times.
Scott Coloney is the founder of Foreclosure Response Team. Contact him at 954.760.4888 or visit ForeclosureResponseTeam.com for more information.