My sister asked my opinion of home values in Redding about three years ago. At that time I suggested, “sell your home now and rent before the financial markets crash”. Needless to say, no one in my family followed my advice. The subject has come up again and I just sent my sister an email with my thoughts, see below.
|Hello Sue and Uncle Tom,
Well, actually this is your second chance to sell your home (if you have equity). There will be a window of opportunity between now and when Obama’s plans go into play. We are already headed down a perilous financial path and the election of Obama pretty much guarantees financial suicide. However, his plan could possibly work out, more on that in a minute.
If you have equity in your home, sell now and find a nice rental. If you don’t have much equity in your home and the economy gets worse, as I expect, stay put as I can show you how to stay in your house without paying the mortgage for at least 9 – 10 months. I’m currently averaging 9 – 10 months with my clients now. The time span could be greater in the future. When I do a short sale for my clients we can often times keep them in their home for a year, MORTGAGE FREE.
Now here’s the best part. After my clients have lived in their house mortgage free, the lender offers them cash to move out. When the lender forecloses on the house they typically offer a certain dollar amount to the previous homeowner in exchange for the house keys. In the trade, this is known as “cash for keys” or CFK. If the previous homeowner moves out and hands over the keys, they receive a check from the lender. The dollar amount of the check is typically $3,500.00 or more! There’s your first month’s rent for your new place.
Another strategy involves skipping a few house payments and then have us contact your lender to do a “loan modification”. Right now we are negotiating loan modifications with APR rates between 2-4%. Don’t try to obtain these rates if you are a customer in good standing, it won’t happen. The lowest mortgage rates are strictly reserved for only the worst customers!
You will get the best loan modification if I do the negotiating for you. Most homeowners don’t stand a chance dealing with ruthless loss mitigators. I guarantee they’ll trick you into singing unsecured notes or modify your loan from bad to toxic. When they are done with you, bankruptcy will begin to look attractive (providing you qualify). They will take advantage of you in a heartbeat! But wait, there’s more! For a limited time if you act fast (within the next 10 months or so) we’ll throw in a principal reduction too. Really, I’m not kidding. With some good negotiating, I have been very successful in getting the lender to lop off an additional $30-$50 thousand dollars or more. This is a principal reduction, you never have to pay it back, it’ yours to keep just for trying my services.
Your credit rating will suffer using these techniques but we are finding credit card companies and even lenders are becoming understanding of these unfortunate circumstances. They’re already explaining the situation away by saying “oh, that was late 2007 or early ’08 when the mortgage meltdown occurred, it’s really not your fault.”
By now I suspect you think I am being facetious. Well, I’m not. I’m dead serious. This is how I have earned my living the last three years. I’m having my best year ever at the expense of the lenders and the tax payers bailout money! Oh, thank you GOD!
Now here’s why Obama’s plan could work. Things are already pretty bad and we could be facing a full-on depression, even without Obama’s help. If Obama is successful in crashing the economy (and I think he will be) the destruction will happen very fast. Just like tearing a bandage off a wound. It’s very painful but it’s over fast.
By crashing the economy, everything will become more affordable. As an example, I’m already able to sell homes to first time homebuyers again. Prices will fall across the board including health care. Thus, the burden on Social Security and Medicare etc. could actually become affordable again. And, if you sold your house, you’ll have cash to pick-up most anything you want for pennies on the dollar. Remember, cash is king during recessions or even survival in a great depression.
By collapsing the economy we will effectively “spread the wealth” by making affordable the things that only the middle class and wealthy could afford in the past. And…the economic cycle starts over again. Typically, the biggest hoarders of wealth are older individuals and they will be too old to do anything about it and will be dead in 15 years or less anyway. Problem solved!
Well, maybe. There are many things I can’t foresee and the plan could definitely backfire. Such as; the biggest contributors to today’s society, the top 3 percent of the population are rich enough to take a financial hit and still continue their comfortable lifestyle. However, when you do this to the top producers of the economy you also take away their incentive to do anything more. Therefore, since they are typically older individuals anyway, they could simply take their bat and ball and go home. And…enjoy the rest of their life while the masses fight over the diminishing handouts. If this scenario actually happens, you and I have little to worry about because it won’t get real bad until you and I are pushing up daisies.
In my opinion, the real losers will be the people that are currently under 48 years old while the young people, those under 23 years old will possibly end up with the best deal. That is…if the plan works. Unfortunately, it’s my opinion the plan will experience a wholesale failure for at least a generation or more. To guess what this scenario would look like you have to look no further than any third world country of your choice.