Hawaii Foreclosures and Real Estate

With the headlines screaming out last week how much Hawaii's Foreclosures have sky rocketed, not once do they mention anything about Act 137, they quote the usual economic woes, unemployment, tourism, pay cuts, and so on. but they fail to ask the question about what happens when you take a Realtor, who has pledged themselves to protect and promote the interests of their client. . You take that Realtor, You tie him up in the corner - because he is not allowed to help you in short sale, you duct tape his mouth, because he is not allowed to talk to the bank and assist you. You call up your insurance man to come over and help you - your probably saying WHAT - but that's how crazy this law is! An Insurance agent is exempt from this law, attorneys are exempt (of course they drafted it) other lenders are exempt. Why not Realtors? The answer is - there is no good reason - just take a look at that magical number - 174% - increase? Tourism didn't drop 174%, unemployment didn't go up 174%? But Realtors were 100% restricted from assisting their client.

Short sales are a challenge for agents under the best of circumstances. They take much more time and often have their commissions reduced by the lenders as a condition of approving the transaction. I honestly don't know of any Realtor that would choose doing a short sale over a regular transaction.

But often times, our previous clients will come back to us, asking for our help to sell their home. I cant tell you how many times clients have broken down in tears at my desk, men and women, and often it brings tears to my eyes. These are hard working honest people, that have spent their entire adult lives protecting their credit and there just caught up the current economic woes, many of them didn't listen when we told them not to take those crazy loans - ARMs - I used to look them in the eye and question them - if you cant afford that higher payment now - what makes you think you can afford it 2 years ? Nobody ever had a good answer. What ever the reason - they need a professional Realtor to assist them in the sale of there home. Now I have to sit there and tell them I cant help them - do you know what that sounds like - sounds like I am running for the hills, I didn't have a problem helping them when it was easy, but now that is a little (lot) more challenging - I am not there for them. How crazy is that? You direct them to a DPC (Distressed Property Consultant)? These people aren't sworn to any oath? No code of ethics? No training required? No licensing? But its ok for them to call your clients bank? Don't get me wrong here - I have found a few that are good - some are Realtors, ex mortgage brokers, and honest people. but for the most part these are a bunch of people that stay up watching too many late night infomercials.

The Moral to the story is - Just take a look at the numbers yourself - those 3 numbers speak a thousand words - they are like a painting on the wall - 174 -

I rest my case Hawaii - We need to get this Law redrafted, and make it work for the people it was intended to protect, and stop all these foreclosures.

Let me tell you a little flip side to the Short Sale vs Foreclosure's:

Fannie Mae recently established a 2-year elapsed time period for reestablishing credit for homeowners who sell their homes through a short sale. Two years may seem like a long time to wait before being able to get a new loan, but compare this to what happens if the homeowner goes through the foreclosure process. According to the Fannie Mae guidelines, effective May 31, 2008, a homeowner who has filed a foreclosure will be "ineligible" for a loan for five years - that's up a year from what it used to be!

Again..this is a crucial point. Someone goes through foreclosure...no Fannie Mae backed mortgage for FIVE YEARS...in all reality that means that they will be renters for at least 5 years. To put his into perspective if someone has a bankruptcy they can't buy for 4-7 years. This should tell you how much Fannie Mae prefers homeowners short selling over foreclosure. Hawaii LLegislators have effectively taken you off the market for the next 5 years by limiting your ability to perform a short sale.

Homeowners need to unite and call their legislators - demand a change in the law !

Alright - I have gone on long enough about this

Its time to head out to the beach and enjoy life some.

Aloha, and have a great day



Lance Owens (RS)

(808) 936-8383

Lance@KonaHomeTeam.com

www.KonaHomeTeam.com

Aloha Kona Realty Inc.

78-6740 Alii Drive