Some real estate agents are trying to profit on foreclosure

This article is very disturbing to me but unfortunately it is an all too common occurrence. There are real estate agents across the US that are trying to make money off of an unfortunate situation of foreclosure. It is true in some cases these real estate agents may indeed help the homeowner but the homeowner needs to know all the facts. Just because someone is behind on the mortgage payment does not mean they need to walk away from the house or sell it. The homeowner does have options to foreclosure and does not have to panic and quickly sell the house. We need to take a hard look at the homeowner's finances before we make a determination. It is bad enough that they are in foreclosure but in some cases they don't have to lose their house

- This is an excerpt from an article posted by the Rockford Register Star, by David Streitfeld - Sunday, Feb. 25, 2007. “Here’s what Dave Hennigan knows about the four-bedroom house tucked away on a tranquil Corona street: The owner is a woman, and she’s $8,155 behind on her mortgage payments.

Maybe she had a messy divorce or expensive illness. Maybe she has been spending too much and saving too little. Hennigan, a 45-year-old Riverside County real-estate agent, doesn’t plan to ask.

As he navigates the suburban streets, map in hand, he rehearses his pitch. “Your name came up on a list of people who might be interested in selling their house.”
That sounds neutral, even sympathetic. If it works, he’ll have his first distressed seller…

…These owners are in crisis. They need to refinance if they can or sell and move into something affordable. If they had an easier option, they wouldn’t be behind in their payments in the first place.

Home Center chief executive Ron Barnard says that personally, he finds foreclosure sad, even tragic. “But as a business owner, I think it’s great.”

“…When you throw out the words ‘foreclosure,’ ‘short sale,’ ‘repo,’ the buyer thinks it’s a deal,” said Bosch. “It’s still very early, but I’m convinced that’s where the market is going…”

…The biggest problem, Bosch believes, was created by the lenders. They used to be cautious. They’d want the borrower’s tax returns, pay stubs and bank statements. The borrower would make three times his monthly payment. He’d have to scrape together a down payment.

Sub-prime loans changed all this. Originally these high-interest loans for credit-challenged buyers were a small segment of the market. But as houses got more expensive, fewer buyers qualified under the guidelines, so they went sub-prime.

Lenders would take their word on income. They no longer needed down payments. They didn’t worry that their loans would soon reset to higher interest payments.

Nobody cared too much as long as prices went up, although many people in the business knew the day of reckoning wasn’t canceled but merely postponed...

“People are walking away from their houses,” he says. “I’m giddy because I’m going to be so busy.” www.rrstar.com