My Suspicions Have Been Confirmed

When the term Short Sale started being tossed around a few years ago, a lot of people thought it would be somewhat of a saving grace to get out of a property that was under water. But, there was major bottle necking on the bank’s end. Why? The bank agreed to process short sales in the first place so why the hold up?

Here’s why: The banks want the properties to foreclose. Oh, I’ve heard too that that’s ‘ridiculous’ for the banks would lose money. Not so. If there is one-thing banks know, it’s how to make money with very little effort. So that being said, not only did the banks manage to swindle the government out of billions of dollars with false promises, they also know that more money could be made on a property if it’s written off as a loss.

Moreover, the banks keep the deeds and then rent out the properties to Section 8 people. Now there is a domino effect. The Section 8 people move in, crime and vandalism goes up driving down the market value of the all the neighboring properties and thus creates more foreclosures and a sprinkling of short sales.

What we have here is an old fashioned shake-down. The government wants more regulations so the banks cannot sell fraudulent loans. The banks don’t want regulations b/c they want as much money as possible regardless of who suffers for it. And who suffers? Regular hard working people suffer for it. The banks are writing very few loans and demanding more money for down payments so unless you have over 20% to put down, you will not get a loan with a fair interest rate. Sure, lenders are dangling low interest rates to get people through the door but then they will convince you and that a credit rating of 750 isn’t good enough to secure a loan at the available rate.

So what can the people do about this? No, really. What can be done? If you don’t have the cash to buy a home outright, then you have to deal with the banks. The Occupy protesters had a good idea to take money out of the banks and use credit unions but that’s not enough and not everyone is on board with that. I know the banks are holding out until a republican is back in the oval office. When that happens, a windfall of loans will be written but the interest rate will be ridiculously inflated.