I believe that in the current housing and economic environment (with declining home values nationwide) it never makes economic sense for a Bank/Servicer to foreclosure on an owner occupied home. In a declining home price environment, a foreclosure is always the least attractive option for a Bank economically, as the time and cost of foreclosure result in lower economic returns compared to other pre-foreclosure options. As a result, I believe we can successfully and rightfully place a temporary nationwide foreclosure moratorium on homes occupied by cooperative owners/borrowers - if we design such a moratorium right and support it with appropriate private sector initiatives.
It’s hard to find much good news nowadays, surrounded as we are by doom and gloom attitudes and news at work, in the media and in conversations. However, I see at least 2 important areas where the current trend is positive for us as a society: Housing Affordability and Humility.
Every American can and should be a part of the solution to the historic housing and economic crisis our country and people are currently grappling with. This is my strong personal view as well as a key founding principle behind my real estate company HausAngeles, and is a view that is shared by most everyone around me both at work and at home. The truth is that until America is back on its feet and stronger economically, there will be millions of Americans (possibly up to 5 or 10% of our population) who need different types of help….but this number will be far smaller than the number of Americans (likely 90 to 95% of our population) who are in a position to help…in some way, big or small, monetary or non-monetary. So if we can help connect those with the ability and willingness to help with those that need this help….we can accelerate the path to economic recovery in a manner that isn’t dependent on the government “bailing everyone out”.
I believe – and I think this is a relatively non-controversial view – that the current recession/crisis has been and will be worse/deeper as a result of fear seeping deep into the American psyche. Even though I disagree with many of the actions and in-actions of the Bush administration/team, I can understand at some level the logic supporting their reluctance to step in to prevent company/Bank failures early in the crisis. However, this very reluctance and the resulting inaction in helping fundamentally sound companies survive failure-inducing-panics significantly deepened the economic crisis by escalating the level of panic and fear in people’s psyche (as consumers or financial counterparties).
Given the widespread nature of our current economic troubles and the number of people having issues making their mortgage payment, there are a lot of players in the market who are trying to help consumers. Some of these players are legitimate and well-intentioned…and unfortunately, some are not. When in doubt, I always prefer to direct people to government, government supported, or non-profit resources (i.e., free resources).
A recent blog introduced you to “HausAngeles” and described what we do, the geographies we serve, what’s unique about our approach and who’s on the team. If you missed that blog and related newsletter, please click here to check it out: Introducing HausAngeles. Now, I’d share with you our mission and vision for HausAngeles. You can listen to me describing this live or read the text below:
Please find below a brief proposal I have put together on the issue of foreclosure prevention and housing market stabilization based on what I and the team at HausAngeles as well as our colleagues, clients and strategic partners are actually seeing (and not seeing) on the ground in Los Angeles/Southern California. I and we do not claim to have all the answers on this “massive issue”. Nor do we claim all of the ideas below are mine or ours (please see footnote 1: acknowledgements). However, refining and executing on some or all of these ideas will be a key focus for me and the team at HausAngeles for the foreseeable future and until the housing market stabilizes. Our primary geographic focus is Los Angeles, but we plan to share learnings and information widely and freely to maximize impact at the ground level.
Ray Mathoda is a Housing Industry Entrepreneur and Founder of HausAngeles, Inc., a Real Estate Brokerage, as well as AssetPlanUSA, Inc., a Nationwide Foreclosure Alternatives Solution Provider.
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