Your CORE Advisor Blog

From where I am sitting, I am still seeing a relatively high number of foreclosures in our area.   I think our market tends to lag the general market by about a year to 18 months. 

Some predict a further mushrooming of this effect as many banks have been waiting to test the water and see what is coming next.

Montrose Colorado is a beautiful place to live and was growing at a good pace and is still expected to double in size over the next 10-20 years. 2 Years ago this was easy to believe.  Now I think it will be pushing clear to the 20 year mark, unless the money supply situation straightens itself out.

Banks supposedly have money to lend (hundreds of millions of it financed off the tax payers backs).  But Banks are not lending as much as they want to because of new regulations and policies enforced by underwriters to ensure safer loans.  Whether you are for or against this doesn’t really matter. Tight lending it is stopping people from buying and selling homes, that would of otherwise been bought rather than rented.

At the same time Credit Card companies are squeezing already strapped people (including me), by cutting their credit limits down and raising interest rates.  Eliminating peoples “Cushion” or “Float” Capital.  This is particularly important for the small business owner with one or two employees who’s cash fluctuates with jobs as they come and go or pay or delay… 

This means people like Realtors and small contractors who rely on credit to finance their business are unable to finance their business and are tapping into any savings or reserves they may have.    They are probably losing out on some jobs because of this lack of available credit.

Many also do not understand that once their credit limit is cut, if their balance exceeds 50 % of the allowable credit, then it docks their credit score, possibly preventing them from getting a home loan.

The credit crunch is real and its affecting hundreds of millions of people and guess who is making money off of it… The banks, the same banks that got us into this mess.  I know there are thousands of “preachers” out there who support that everyone have a “strong” or even entirely cash position and boy wouldn’t that be nice, but Credit is a lot like a drug, they get you hooked and used to using it and then when they cut you off you are in real trouble.  Its unfortunate that they are using the current housing crisis as a time to try to make more money off the backs of the struggling American and that they have overtightened the money supply for home loans.

Montrose Colorado really didn’t have a foreclosure problem, until the money supply dried up.  This stopped construction and caused lots of layoffs and for people like Realtors, their income was halfed, quartered or even eliminated, leaving the them with a deficit.

I personally had a sizable chunk of savings and available credit for “down times”, but it has been eroded and used up and I can’t just force people to use me or to even decide to buy a house. 

I have never worked harder and been paid less in my life.

There is a glut of inventory on our market and many prices have not fallen yet to where I feel they will actually be purchased.   Most shoppers are looking for a 50 cent on the dollar deal…  Few exist.  Those that do are offered from “motivated” banks, but they usually require a great deal of repair and fix up, so this usually cuts out the first time home buyer and focuses on the investor.

Then President Obama decides that we will incent or attempt to force banks to do Loan Modifications with their borrowers, but the process is extreamly slow, uncharted territory and many are getting ripped off by shisters advertising on the radio, internet or otherwise that they will take care of everything and they are not, the people still get foreclosed out.  Others upon ill advice of attorneys or other counselors or spinners are suggesting to people to miss a payment to begin negotiations.  While this kinda makes sense it is just increasing the problem and it screws ones credit up BAD for about two years.  This is basically the same as a short sale on your credit based on my understanding. 

If you are going to do a Loan Modification, either do it yourself or call the state hotlines first.  Get references for companies from real people (preferably in your area and trust me its worth your time particularly if you REALLY want to keep your home).   Ensure that the hired negotiator will take no upfront moneys from you.  They only get paid when they get the Loan Modification with the exception of a small fee (under $150).  If they want more upfront money be very careful and require joint notification of each submittal and call the bank yourself to follow up with it.

Of course you can always call a Realtor for advice!  Ask a few questions to see if they know what they are talking about and if your not convinced, try another.

You can reach me at (970) 209-0252. 

Thanks Chris