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17 September 2010

Week in Review: Things We Liked from the Week That Was

This week marked the second anniversary of the collapse of Lehman Brothers, an event which changed the way people thought of Wall Street and added terms to our lexicon like Too Big to Fail.  I can’t help but think back on the economic roller coaster we have been on and how it is still affecting the housing market today.

One of the biggest changes I have noticed is Americans’ view of homeownership.  According to a recent survey, the number of Americans who say that homeownership is a safe investment has declined to 67 percent. Another sign of the times is the staggering number of borrowers contemplating a strategic default on their mortgage.

To try to combat this, the Loan Value Group has created a “Responsible Homeowner Reward,” which pays borrowers a small amount of money in exchange for staying current on their loan. I hope this helps convince some of the 19 percent of those polled in a Pew Research Center survey who said it was acceptable to walk away from a mortgage.

As Andrea Bocelli would say, is it time to say goodbye … to Freddie and Fannie?  According to a top Treasury Department official, the agencies will not exist in their current form after a revamp of the U.S. housing finance system. Stay tuned for proposals after the November elections…

A practice that is gaining a lot of attention lately is a “resale fee” that allows a developer to collect one percent of the sales price from the seller every time the property changes hands for 99 years. Be sure to tell homebuyers of these fees as they are often communicated in hidden, small print. Arizona has already passed a law that prohibits these. Stay tuned for similar actions on other states…

If any of your clients are considering home editions, you should emphasize they should be of code. Agencies in Florida have begun using Google Earth as a tool for investigating illegal additions to homes and other code violations.

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