Opinions on Foreclosures

Posted on March 27th, 2009 by saman

Actually, the foreclosures crisis is a test. It is like a computer game. You can choose to win the game cheating and behave like hackers or you can choose the right path and join forces in order to be a winner. I am very convinced when I say that kind-hearted people gathered together can win, and noble feelings can win. Just try it!

We propose you to try to help as much as you can an innocent child, and you will be amazed at what satisfaction you can have when they thank you for your noble gesture.

Come to fight together and we are convinced that we can survive together this foreclosures crisis. Even we would be curious to know how many people have made a noble gesture at least once in their life, and what they felt at that moment. It is a test and everyone is invited to pass it.

Furthermore, most of the people had the chance in the recent months to talk and to hear the opinion of a very diverse set of people in the real estate market, from the managers of large firms, to neighborhood’ firms or real estate agents, developers and evaluators. We can afford to put end to end these experiences and to present a synthesis, which, like any synthesis involves generalizations, which can be overlooked where exceptions occur.

The drama of the real estate and foreclosures market is that they have forgotten (or they have never really known) that they are there to serve their customers who buy a home and investors who invest for profit. Until the whole property specializations chain fails to serve its customers, the market will stagnate and consequently prices will drop. It is so simple!

Let us focus on investors because much of last year’s foreclosures transactions were made with the purpose of investment (that we have no idea what exactly the proportion was, is contributing to this foreclosures tragedy). When an investment is made, you should have a plan to show how that investment will bring money. However, when the economy is in a boom, there is installed a feeling of gold rush and a false certainty that you will always find a naïve buyer of your property. Investment discipline justification disappears.

For small investment, customers do not even require advice. They simply use specialists’ tips as it is accepted de facto as a good investment (so it is explained why may act as “specialists” people without a little training in the field who just heard those tips). For large investment, specialists advise based on information from their own portfolio.

Nevertheless, in their rush for gold nobody considers the detail that the portfolio represents only a fraction of what is happening on the market, as the figures are not relevant to the whole market. Now, let us suppose that here is the end of the foreclosures boom! (I say this because we are in recession and foreclosures crisis, according to the definition). It is acknowledged the general reality that there are not losers any more to buy your investment at the price you need to buy the luxury car you desire.