I am going to make a bold statement as a result of this just passed bailout bill. I believe the bill has just rendered foreclosure investing to part time hobby status.
It is my intent to continue to pursue foreclosure investing but I believe the bill has changed all of the ground rules. The bill has made the big boys whole and left the little guys holding the bag.
The big boys can now give their loans to the government and walk away. They never have to concern themselves with short sales, loan modifications or workouts. If a homeowner is in trouble, so be it. They do not have one iota of incentive to work with him or her.
I can no longer work with the homeowner because the lender won’t talk to me. Oh, they’ll talk to me but only to tell me to have the homeowner fill out a handful of meaningless forms and submit them for review.
Rather than reviewed, they get rejected. The appearance of “workout” is maintained while the homeowner agonizes over what to do, where to go once they lose their home. The lender knows what to do and where to go – give it to the government.
To add insult to injury, the president gets a slush fund of $100 billion to do with as he sees fit. Why should the president get a slush fund? Oh yeah, he helped cause the mess so he naturally should be rewarded like his Wall St cronies.
Grinding more salt into the wound, we all know financial markets have a way of correcting if they are free from tinkering. We’ve seen it throughout recorded history. The only time they didn’t was when government stepped in and took over or should I say poured salt on the wounds.
Big government just stepped in and took over a market better suited for correction by in the trenches investors who were willing to put their own money on the line. They had no plans to use the collective treasury and make their great grand children de facto debtors.
I write these words because I am in the middle of two properties with two different lenders and being stonewalled by both. My reasoning told me there had to a method to their madness. This bailout bill explains it all. Their top brass knew the likelihood of a bailout was so high they didn’t have to concern themselves with a short sale or a loan modification. They would be made whole if they just waited long enough.
I Don’t Think I’m Alone
I can’t believe I am the only one in this type of situation. Maybe I’m like the guy who sits down to play blackjack and doesn’t even know 21 is the winning number. That’s possible but I’ve been in the real estate game for over 15 years and learned a thing or two over that time. So, I think I’m sharp enough to work the trenches so to speak.
It’ll take some long, tall talking to convince me the deck isn’t stacked against those of us who call ourselves real estate investors. On the other hand, if we don’t mind the few scraps we will be allowed to hustle, then maybe foreclosure investing isn’t dead.
I sound like a crepe hanger but I am not the only one feeling this way. The local foreclosure investing herd has been thinned and is getting smaller and smaller. If it is happening here, it is happening in other areas.
I wish the bill had been a real bailout and added us to the protected species list. Had that happened, we would have seen a real estate market turn around in record time.
Photo Credit: striatic