I found a $300,000 home for $150,000.This seems to be all we hear nowadays. But the fact is ...the home IS NOT a $300,000 home, it's a $150,000 home. It was only worth $300,000 at the top of the market. Of course, the seller, government, wall street, builder, banker, real estate agent and tons of stores all benefited when it was $300,000. Tons of money was moving in and out of the economy and everything looked So Bright! Everyone was enjoying the ride going up. We all felt Rich just like the movie stars. Spending was at an all time High.
STOP those days are over. So how did we get here? Where are we going? and Will there be a "Bail Out" number two?
We all have read about how the Big Bad Bank took advantage of the Little Homeowner. But the fact is the government told the banks "Lighten Up". So they did. Everybody liked the banks and there was a buying and selling frenzy. Until the market was no longer climbing. Then people no longer liked the banks and said "You can have my house back". But banks don't sell homes they only loan money. So they hired a few bank agents and said "Get it sold and Quick". So the agents did and the market began to fall. More and more foreclosures came and the prices fell faster. Now the banks were really in trouble. So the banks went back to the government and said "It's your fault so Bail us Out". The government agreed passed a huge "Bail Out" bill H.R.1424 with lots of Pork added. Now the government will buy the bad loans with money they will borrow from the banks and we'll all pay the difference. The sad thing is the government doesn't have any experience selling real estate either.
So where does that leave us? Well, we just may see the market drop a bit more. The once $300,000 home may drop a bit more But hold on do not foreclose. Don't walk away. Fight for what you have it will come back. You have to live somewhere. If you are having trouble making your payments in the state of Michigan visit Save the Dream. Otherwise visit the HUD site . Contact a local real estate agent and see if they can help.
Americans need to stand up and fight. Unlike the government we the people may need to tighten up our purse stings... cut cable, cut vacations, stop wasteful spending, sell the stuff we don't need, cut utilities ect. Some may need to get a second job (yes there are some available). If we don't fight we will end up with Bail Out number two.
Great article, actually the Govt does have experience selling real estate, check out the RTC in the late 80's, those who bought during the first round of selling pretty much got the bottom and those who waited to see if the price would go lower ended up chasing the price.
I suspect the liquidation round for the current bailout will be modeled after the RTC. Time will tell.