The details are still evolving, but the proposed bailout is now estimated to be $700 Billion. How will this impact the Tampa housing market? Will the bailout address the problems of distressed homeowners in the Tampa Bay area, or will Congress cater to the needs of Wall Street?
· The $700 billion that is being proposed is much less than what will in reality be needed, I expect to see the total cost of this crisis including what has already between spent exceed $1.5 Trillion.
· There are currently over 10,000,000 homeowners in distress that either are in foreclosure or in default on their mortgages, there is no way that the government will be able to take over all of these mortgages so other solutions will have to be found.
· We know from the FDIC takeover of Indymac that the government is negotiating Short Sales aggressively and doing what they can to prevent foreclosures. This is an excellent predictor of what will happen as the government takes over bad mortgages.
· The director of the FDIC Sheila Blair has stated “our goal is to get the greatest recovery possible on loans in default”. What does this mean? The FDIC is looking to get every penny it can and that is going to be through short sales – not REOs (Foreclosures Owned By Banks). There have even been discussions about temporarily stopping FDIC foreclosures while ‘alternative’ (read short sales or workouts) solutions are explored.
· We have seen several different proposed bills and new legislation that actually provide an incentive to banks to work out short sales with everything from a $2,500 credit paid to a percentage of the loss being paid by the government (read us the taxpayers).
The bottom line is that the current bailout will likely increase Short Sale opportunities in the Tampa market, not decrease them. The government will not be able to take over the total number of mortgages that are in danger of foreclosure so aggressive prevention will be necessary.
Hence, the need for skilled Realtors with proper training and recent experience handling Short Sales is greater than ever. Realtors in Tampa need to know how to address these issues now – we have seen the approval times on well presented short sales shrinking and agents are getting a much higher percentage closed. Contact Team Bohannon today to speak with a Distressed Property Expert (CDPE) to discuss Tampa Short Sale options.
- by dale bohannon
great blog entry Dale!
Thanks Alex. Your Certified Distressed Property Expert (CDPE) course was awesome. Your CDPE course is highly recommended for any Tampa Realtors who want to thrive in today’s market where Short Sales, Pre-Foreclosures and Bank Owned (REO) properties are such a big factor. Thanks for providing most of the insight above. Your analysis is dead-on and very relevant for home owners in Tampa Florida, and for buyers looking to purchase homes in Tampa Florida.