Kirsten's Sonoma Real Estate Blog

Something needs to be done to help the short sale mess, but I think it's crazy to give the short sale sellers cash.  Most short sellers are already motivated and just want out of the financial burden, why do they need to be paid?  I know there's cash for keys but all this money being spent just comes out of each and everyone of our pockets and it needs to stop.  I'm tired of paying for other people's mistakes....

Kristen The new program creates more problems for the housing recovery. Good luck and success. Lou Ludwig

Michael:  I'm wondering if the cash to homeowners would be paid in lieu of more bailout money going to banks.  I'm tired of paying for other people's mistakes, too.  Especially tired of hearing about bank executives getting huge bonuses while more and more homeowners are sinking underwater despite keeping up their payments.  I don't think the banks have done enough to stem the flood of foreclosures.  I actually think there's been a practice of delaying short sale approvals until foreclosure is the only way out....and the lenders are getting compensated by the FDIC for their losses.  I guess I'm wondering if it doesn't make more sense to help the homeowners at this point since the banks clearly have not done much to help them out despite federal assistance.  Your thoughts on this?

Hi Lou:  Can you elaborate?  How does the program create more problems? 

Kristen: I'm not sure that I follow the logic of David Likens (sp?)...It will ultimately be up to the lender to decide which offer to take, not the homeowner. There is still going to have to be a basic valuation done by a (hopefully) objective third party that will set the asking price -- not the homeowner. The lender will not be compelled to take any offer that doesn't come in at or near that price. So, I don't see how the homeowner will be able to, as Likens claims, go into cahoots with someone to buy the property and make money out of the deal. As I see it, the inherent danger in this program lies with the 'objective' third party who is doing the valuation...Now there's someone who -- if they're inclined to dishonesty -- could stand to gain something for undervaluing a property. All that said, if the program works as we should all hope it does, it will help clear this tremendous log jam of short sales by compelling lenders to make a decision in a reasonable length of time...Something that is long overdue.

Hi Kirsten. I hate to see another plan that helps devalue the markets and encourages people to basically just "dump" their houses - it really does hurt the ones who stay and pay. The cash paid to the SSseller is $1500. - in most markets, that's not really a huge sum to help with moving, first and last month's rent, utility deposits etc... Is this all we can come up with? Good grief. I find it hard to believe that all SSsellers really want to sell. Most of them want to get out from underneath huge mortgage payments on their underwater houses - isn't it possible that some don't really want to move? We know the loan mods under the current guidelines are not helping many, but wouldn't the banks and investors be better off working with the homeowner who is presently in the property in most cases?