Obama’s Anti-Foreclosure Program Failing Could Be Good News for RE Investors
Obama’s Anti-Foreclosure Program Failing
If you have cash, the deals will continue to flow. Keep reading to learn why.
The anti foreclosure plan was meant to keep 4 million people from facing foreclosure but, and a new TARP report now says that number “meaningless.” About 530,000 of the 1.3 million government modifications have been cancelled since the program started 16 month ago.
Obama’s anti-foreclosure program, the $75 billion HAMP, posts worsening results as time passes. More than 91,000 homeowners cancelled their government loan modifications in June alone, while about 39,000 received new modifications.
The inspector general of the TARP (Troubled Asset Relief Program) says this is atrocious, and calls the program anemic and the failure can be blamed on the continued trouble in unemployment.
While foreclosures in the US run at about 300,000 a month, more than 11 million mortgages are underwater. People are still willing to default on mortgages even if their income is not a problem. Many people lament that their homes will probably never be worth what they paid for them. Many people will not stay in their houses unless their outstanding principal balance remaining on their mortgage is reset so they have some chance of eventually selling at a profit.
The loan modification program is badly broken.
Bottom Line:
First the bad news:
For Residential Real Estate Investors: A lot more foreclosures are in the future possibly driving values even lower. These lower values and continued high unemployment will force rents down. Vacancies will go up.
For Commercial Investors: High unemployment simply means consumers’ will not be buying. If consumers aren’t buying, the retail business will continue to fail and default on their leases and, obviously, current retail space will go vacant.
Companies firing their employees will not need office lease space.
Now the Good News:
Investor with cash (or can raise cash) can find really great deals. But, beware, your exit plan should be 5+ years out and the deal needs to cash flow from day one. Inflation will not ‘bail you out’ for several years.
My advice: Be carefully who you rent to. I know your anxious to fill your empty property but, don’t let you desire to fill an empty property rent to the first smuck that comes along. Trust me on this: to evict a bad tenant costs a lot more than waiting for the good tenant. You need so spend more money marketing you property to find the ‘good’ tenant.
For the entire 282 page report, click here.
For a Free Copy of my Net Net Net Lease Agreement and more Forms and Agreements for Real Estate Investors, clicking here .
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16 Comments to Obama’s Anti-Foreclosure Program Failing Could Be Good News for RE Investors
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Well said wait for the right tenant to come along to rent to. Real estate these days has taken a nose dive due to the economy so more people are defaulting on their existing mortgages because the house is not worth as much. They would rather cut there losses and get out as fast as they can. This brings more people willing to enter into a rental lease agreement, so there should not be a problem in finding some good tenants to rent too.
Obama's new legislature is definitely changing the markets. It'll be interesting to see what new challenges the real estate market will have to face.
Definitely more focus will have to be put on the marketing side of things if people want to stay competitive and in business.
I have never had to charge as little rent as I am right now and have never had more vacancies. The talking heads love to go on about how the recession is coming to an end but I just don't see it. Obviously, I am looking forward to this.
I must be one of the lucky ones. I have zero vacancies and am very happy with the amounts I am getting for rent. Recession? What recession.
It is way more difficult to make money in this business then when I bought my first rental property. My area was one of the first to be hit by the recession and I can see signs of a recovery. I am looking forward to having zero empty properties.
a very useful article for everyone. I think this article is very useful for people who want to learn about Obama’s Anti-Foreclosure Program Failing..thank you very much
All the information in the above article is very crucial for us to understand the rental details.it must helps to everyone.i should follow all the above details.this is the recession time and we should take care of this.rental property business is recovering fast.
definitely Obama’s new legislature is definitely changing the markets.and more focus will have to be put on the marketing side of things if people want to stay competitive and in business..but its quite impressive one and i am sure it will be good deal…
anti foreclosure program failing is definitely informative and it can help many people to learn more about the marketing aspects of obama team.it is really useful to know more for all and to know what is obama currently doing ,really amazing to read
obama's new legislature seems to be changing the condition of the markets. lets see what happens now. i found the article really interesting. its quite ok and i hope the deal will go good
Obamas administration really seems to affec these things, hope it turns out good soon…
So right about evicting a bad tenant costing way more then having the place empty, I know that from experience.
Your advice on raising money now in order to buy up unwanted and cheap property is very well documented in the book 'Rich dad poor dad' – a very recommended read to supplement your post.
they are making decision according to market changes. The talking heads love to go on about how the recession is coming to an end but I just don’t see it.
In some states, particularly those where only judicial foreclosure is available, the constitutional issue of due process has affected the ability of some lenders to foreclose. In Ohio, the Federal District Court has dismissed numerous foreclosure actions by lenders because of the inability of the alleged lender to prove that they are the real party in interest
Obama’s new legislature is definitely changing the markets. Lets see wats gonna happein now…
Obama’s new legislature is definitely changing the markets….