News of the finance

Lets face it, homes these days are sitting longer and selling for less.  Why the big change?  The banks were too greedy and now most of them are in a world of hurt.  Lets take a look at what the banks did or didn’t do to create such a problem.

 

One of the big problems is that banks and credit score companies try to make understanding credit so difficult and mysterious.  I want to know how they come up with those numbers and I know everyone else does too!  The reason why banks want to make credit scores so difficult is to make sure that your credit stays low so that they can charge you more interest every month.  Greedy banks.

 

Then they lightened up the credit score requirements and let just about anyone qualify for a loan.  That is ok in my opinion.  Then the greedy banks had to throw in another element that was a big trap.  Make ARM loans, interest only on 100% loans, and negative amortization loans.

 

Then markets around the country started to lose their momentum and leveled off or dropped slightly.  Consumers with 100% loans were upside down.  Then ARM loans started to adjust up and homeowners couldn’t afford the payments.  So they started to go into default.  Which created even more problems.  The media started to get involved and created a panic that real estate was going down.

 

That is what started the snowball effect that spun out of control and became what we know today as the mortgage meltdown.

 

What are the after affects of the mortgage meltdown? 

 

Now your credit has to be so high that 2/3 of potential buyers were eliminated from getting the chance to get a mortgage.  That was a lot of buyers done in overnight.  That meant the inventory of homes in most markets were too high due to lack of buyers. 

 

The media then really started to get everyone in a huge nationwide panic that real estate was dropping like it had never dropped before.  Which may or may not be true depending on your market.

 

What should have happened to prevent us from the mortgage meltdown?  Banks should have explained credit, not made it impossible to understand.  They should have kept lending guidelines somewhere in the middle of the credit scoring and never tricked buyers into doing loans that were such high risk.

 

What can you do about it?

 

Forget about selling if you don’t have to.  Don’t let the media or any one else tell you that the market is going to tank.  They don’t know!  No one knows what tomorrow will bring.

 

If you need to sell, find creative alternatives to selling.  The best one that I know about is Seller Financing.  Why choose seller financing?  Because you become the bank!  You then can decide who can buy your house and who cannot.

 

For more information on Seller Financing or any other real estate question contact:

 

The Bronson Barber Real Estate Team

801-712-1607

bronsonbarber@gmail.com

 

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