The Foothills Ahwatukee Real Estate

We keep reading about the sub-prime mortgage crisis. One of the best articles written came out of the Wharton School of Business, University of Pennsylvania. Its URL is below. You may have to sign in to read it, but its a pretty innocuous sign-in and its worth the read. http://knowledge.wharton.upenn.edu/article.cfm?articleid=1664One commenter to the article concludes: It is truly a sham.

This practice results in injured home owners, jobs lost in local small business in the title, appraisal, apartment and lending industries. Furthermore, it impacts property values with a rash of foreclosures and has replaced inexpensive loans in the competitive market place with expensive loans in closed market.

By: Robert Merkt, Unison Financial Group, Inc. CEO Sent: 12:11 PM Sun Mar.04.2007 - -But all of this leaves me scratching my head as to who gets hurt. I’ll have to ask a friend of mine, John Wake, an economist and broker who runs http://www.HomeSaleNews.com because he’s a bunch smarter than I am.

Obviously, I can see that a “rash of foreclosures” dumped on the market simultaneously would have an impact on pricing and keep us where we are in terms of sales for a period of time, but the fact is, those homes will get repurchased by other buyers and they are not all going to come at one time. It took two or three years for those lousy loans to be made, and it will take even longer for those that are going bad to go bad.

I’m a real estate broker not a loan officer, but I’m thinking, who really got hurt here? Because of the secondary lending market, homeowners bought homes who NEVER could have purchased homes before and not all of them will loose their houses. Some of them will, its true, because there are bad people out there who did predatory lending with innocent buyers. But that happens in every market. The knowledgeable always have an advantage over the ignorant. And frankly, some clients purchased homes with loans I took time to explain would be very dangerous for them to take. After that, what can you do?

As far as people loosing jobs in the industry, mortgage, title, escrow, real estate….. If they made a little money in the secondary mortgage market and could not see the temporary nature of the beast, and lost thier jobs….so what? Whose fault was that? Their own, I think.

Who lost the most are going to be the investors, hedge fund managers, and the rest who saw an extraordinary financial opportunity at other people’s expenses. Ask me how sorry I feel for them. No, don’t waste your breath. I don’t feel sorry at all.

A new industry will grow from this, that of buying and selling short sales from investors and other REO property lenders who get tired of holding on to “lost cause” properties. Because many of these properties will have seen better days, (have you ever seen a well kept house that had been foreclosed on), the same folks who originated the loans can now become the handiwork men and woman of the future and can fix up the homes to be resold. He its an honest job!

The lengthy article this post was generated from thought of the housing market in a cautiously optimistic way. I’m just optimistic. What goes up comes down, what comes down goes up; the only constant of change is change itself. We’ll be just fine folks. Can I find a foreclosure for you?