Hey Congress, Want to Stimulate the Economy? Let Banks Foreclose Faster!
Sounds Crazy right? However, here me out for a minute. First of all, I am not speaking for the families who are trying for loan modifications with their lender or trying for short sales. I completely believe that banks should do everything possible before foreclosing on anyone and exhaust all options if the homeowner is cooperating and trying to save their home.
However, in many cases the homeowner just simply cannot afford the home any longer and they are not actively engaged in trying to save it through a loan modification or a short sale. In many of these cases the homeowner moves out and vacates the property or they are simply living their until they are evicted. Meanwhile the home is not being taken care of which is bringing down the value of the homes around it. However, the banks are delaying these properties still each month from going to auction... Why?
Example: Did you know that less than 5% of the homes scheduled for the foreclosure auction each month in San Diego county are actually sold to 3'rd party investors or back to the banks? The rest are postponed til some point in the future. Who know's what that percentage will be now with the new moratoriums and state lawsuits.
Why would selling these homes faster stimulate the economy?
When an Investor buys or a bank sells a foreclosure home there are many, many people who benefit...
Let's use a real world recent example of an investor buying a dilapidated bank owned listed foreclosure for $350,000: I will run the math below to show stimulus.
Who gets paid on the initial purchase:
- Buyers Agent
- Listing Agent
- Loan officer (if loan is involved)
- Title Officer
- Escrow Officer
- Past Due Taxes or back due HOA's get caught up
- Processors and Agent Assistants
Who gets paid on the rehabilitation of the property:
- General Contractor(s)
- Painters
- Roofers
- Cabinet Makers
- Landscapers
- Landscape suppliers
- Window Manufacturers
- Flooring Specialists
- Supply Companies (such as Home Depot, Lowe's)
- People who supply the products to Home Depot, Lowe's
- Appliance Manufacturers
- Waste Management Rental Trash Trailer
- Buyers Agent
- Listing Agent
- Loan Officer for new Buyer (if loan is involved)
- Lender Underwriter and Staff
- Title Officer
- Escrow Officer
- Processors and Agent Assistants
- Sign Rental Companies
- Marketing Companies (to market the listing)
- Investor who took the risk
- Home Insurance Companies
- Furniture Companies
