Today, foreclosures are on the rise and more people will lose their home this year and for a few more years to come if lenders keep giving band-aid loan modifications of 1-2 years.
This brings up another issue; Homes that
are being foreclosed on are selling at tremendous prices which means a
lot of opportunity is
out there, yet it is not reaching those who should be able to take
advantage of these opportunities. Why? Because they are being sold to
investors who are coming in and paying cash or buying with large
down-payments and turning these properties into rentals which
eventually drives property values down. What's even sadder is all the
families who want to be homeowners but can't because they can't compete
with investors who have big pockets. But these big pockets are not
getting lenders more dollars, they are just closing quicker and getting
the loans off the lender's books faster. It is common knowledge in the
industry that investors can buy a property for much less than a family
who wants to buy a property as a primary residence because they have
cash or large downpayments.
Think that lenders care about you? Think again. There has to be a solution for this by putting a limit on how many REO properties can be sold to investors. This would mean that lenders still get true value for their properties, only these properties are now going to proud homeowners who will care for and maintain their home while realizing the American Dream and maintaining property values which helps everyone in the long run.
I totally agree, I've been competing with investors for months now and as a first time homebuyer I'm losing the battle. I mentioned it before that investor need some regulation, but will it really happen; let's cross are fingers!!
Posted by: Lori | 07/31/2009 at 11:50 AM