Housing market continues to play a crucial role in the economy

By: Joshua C Anderson

Afshar Properties Chief correspondent

Thursday, November, 3rd 2011

As of today there are over 7 million homes in foreclosure or delinquency. Furthermore, there are 11 million homeowners that are underwater and likely headed into the direction of foreclosure. Several unsuccessful attempts by the government have only made the situation worse, so what next on the agenda?

Fed chairman Ben Bernanke has been trying to balance out the situation between the housing market and the economy for quite some time. According to recent reports the Obama administration is planning on broadening the spectrum of a program that would allow underwater homeowners to refinance, a plan that will almost certainly fail. The obvious reason for failure is that most of the homeowners won’t qualify; lenders will have to take into consideration a borrower’s credit worthiness and ability to repay the new loan. Another key factor that will add to the demise of this new program is that the majority of the delinquent homeowners are unemployed and have been for some time. If we take a step back and look at why the mortgage modification plan didn’t work out, we see that the banks wanted to see steady income, and one who is unemployed cannot show a steady income. This and several other factors played a crucial role in its demise.

Homeowners who could not qualify for the modification ultimately were left with few options, those who were able to continue making payments stuck it out, while the rest ended up further defaulting and ultimately foreclosing. There is however one option that used to be overlooked, the short sale. This is a process where a lender allows the homeowner to sell the property for less than what’s owed.  The end result is the homeowner avoids the ramifications of a foreclosure and in some cases receives relocation assistance.  This type of transaction used to be dreaded by most real state agents, however, over the past year they have become increasingly popular. Housing Assist of America, a branch of Coldwell Banker, has seen there fair share of short sales, with over 350 completed since 2008, they are among the top short sale negotiators in the business.

Housing Assist Coldwellbanker