The Case For Refinancing (For The Banks Too)

It would be great if the housing market could find a spark. What is out there that can move the market?

Time To Release The Refinancing Hounds

Could refinancing be the spark needed to get the housing market and the general economy moving again? The case for this has to be made. Here are some reasons why in the medium to long term, it should help everyone involved in the cycle:

-          Homeowners – There are many homeowners that have proven their worth by still paying on mortgages.

-          Businesses – Everything connected to housing would benefit from this type of move. Builders would see more activity. Local governments could start seeing higher tax revenue. Families could start living in their own homes.   

-          Banks – Most homeowners have shown that even though they will not be able to refinance their loans, they have not walked out on them.  The ones that couldn’t are already out of the system. The banks should take advantage of this loyalty. The amount of money received right away from the fees will at this point outweigh the loss of revenue over the next 25 years. Some banks that are not as tied to trading for profits as others could use this to boost current period revenue.

The How To Plan

-          First, target all homeowners that are consistent with their payments and are within a certain percentage (maybe 2-5) of the current requirements for refinancing.

-          Offer them a standard refi program with a penalty fee worth the thirty year Net Present Value of the reduced value of the home. 

-          Another option is to attach an annual fee to the mortgage if the Net Present Value of the reduced value is too high.   

100th post

This is this blog's 100th post.

I thought it should be used to notify everyone that there is one less short sale on the books as my wife and I took it off of B of A and HSBC's hands.

If you want any info on short sales, send me an email and I will answer any questions you may have. It did take 7 months and had a bunch of issues with it but the price and neighborhood were right.

Cheers!

Bank of America

Hey

I am going through a short sale that took Bank of America seven months to resolve. They in turn gave a two day notice to accept or the house goes to foreclosure. So nice of them. They have their jobs because of us.

The Pres said what?!!!

Hey everyone

I know it is all to easy to catch our fearless leader in a confusing phrase but this comment from Yahoo! regarding the economy shows just how clueless he really is.

"There is no question that there is some unsettling times in the housing market and credits associated with the housing market," the president said. But he said he didn't see that spreading to the broader economy.
Bush said he was optimistic about the economy. "But I would be pessimistic if I thought Congress was going to get their way — and they're not. We're not going to raise taxes," he added.
Pressed on whether he thought there was any risk of recession, Bush said: "You need to talk to economists. I think I got a B in Econ 101."

So, let me get this straight. He makes a judgement on the effects of the housing market on the rest of the economy and then comes back and explains that because he received a B in Econ 101, he isn't qualified to comment on whether or not we are headed for a recession? Unbelievable.

- This is the time to pick up some investment real estate. This is very similair to the stock bubble. I think the recovery will be just as profitable as the stock market recovery has been for the last four years.

The Wikiwealth portfolio consists of the following:
Pepsi Stock (www.pepsi.com)
AGG Bond ETF
SharebuilderMoney Market (www.sharebuilder.com)
Optionsxpress Money Market (www.optionsxpress.com)