With the proliferation of the mortgage market meltdown I address on other sites, we, as a nation find ourselves in the midst of...a mess. A big one.
We'll dig out of it but it ain't going to be easy.
You've probably noticed in your own city, maybe in your own neighborhood, more than unusual numbers of "For Sale" signs, unkept yards, and in some cities, a ghost-town-like feel. Empty of children playing, neighbors mowing the lawn, etc.
It's because most homes in most neighborhoods are...empty.
Recently the federal government passed a new bill, now law, called TARP. "Troubled Asset Relief Program) and man is it a doosey. As usual, you, I, our children and their grandchildren get to pay for it. All because somebody was asleep at the switch.
It amazes me that only when some politician gets caught with his hand in the cookie jar does "the issue" become a matter of concern. As long as politicians and CEO's are making money - LOTS of money, nobody's going to be a "whistle blower".
Back in the late 1980's we had a similar, although not as widespread occurrence which prompted the creation of the RTC (Resolution Trust Corporation) which I participated in by liquidating assets in Southern California.
See, THAT whole mess started when some idiot politician decided "deregulation of Thrifts & Loans" for his campaign contributing CEO buddies at those institutions was gooood. Very few masters of disaster ended up paying for their crimes. Most notably are Charles Keating, Jr., Michael Milken and Thomas Speigel.
Can you say "Junk Bonds"? Seriously, who would EVER buy anything that contained the word "junk" in it? At the time, the junk bond market racked up losses topping $200 BILLION dollars. We thought that was surely the end of the financial markets as we knew it. Hmmm, what amount are we up to now?
So now the American taxpayer gets to eat the entire cost of yet another bailout. It does however, sound like there might be some light at the end of the tunnel. The government will share some, if any, profits from sales of toxic assets with the taxpayer.
Toxic assets were created when mortgages for overpriced homes defaulted. The market of over priced homes was created when investors fat with cash looked at places like Las Vegas that historically had annual appreciation rates of between 3 and 10 percent. It also was one of the fastest growing cities in the nation. Those two factors were a formula perfect for profits. It was a city ripe for aggressive appreciation IF existing property could be bought then flipped. Which is exactly what occurred.
Yay.
The downside is that values of the properties and underlying mortgages have deteriorated to the point where profitability may be elusive. That's where you and I come in.
My role is to market assets that are deteriorating on the market, yours is to scoop up a bargain and call it your own. They're easy to find as long as you have a realtor AND loan officer you can trust. That's the secret to not falling victim to what contributed to this mess. Getting educated and informed, then making an intelligent decision.
Oh, BTW, DO NOT EVER, under ANY circumstances, feel or be forced into signing any loan documents BEFORE reading and taking notes of anything that doesn't make sense or you don't understand? Understand? I don't care if the friggin moving van is waiting outside in the 100 degree heat or the snow is coming down at two feet per second...just don't do it.
If you don't understand something in your loan docs, ask. The escrow officer, the mortgage company manager, an attorney, me. Make sure you understand what is expected of you and what the worst is that could happen. If you can live with that, then sign. If you can't, don't
So...what are we waiting for?
