A fair solution.....

NEW -> Contingent Buyer Assistance Program
N

NanoWest_IHB

New member
There is a lot of talk about the "bailout" of Bear Stearns and how it is not fair to bail out BS and not the underwater homeowners that don't(or can't) afford to live in their homes.





Here is my proposal:





The government sets up an agency that auctions foreclosed homes. If a homeowner misses 4 payments, the agency gets the home within two weeks. The house is then immediately sold at auction to the highest bidder. Proceeds from the sale are split between the bank....they get 90% and the displaced home (ex)owner who gets 10% to start life over again.





Every wins and everyone loses in this scheme ----





The public has to pay for the agency, but the public gets to buy homes at great prices at auctions and the economy gets stimulated by the purchase of all the homes





The bankers lose a bunch of money, but they get to clear their books very rapidly and get on with their business, they get to loan money to people buying homes at auctions.





The (ex) homeowner has to move out very rapidly from their home, but they get enough to start a new life with their 10% gain...... or possibly buy a new home if they have good enough income.








Problem solved......
 
<p>You would have REIT's bidding on everything, the 10% would be drained by lawyer's fees from lenders looking to recoup losses, and the banks would be bidding against the REITs to artificially raise the price.</p>

<p>I like the way you think though.</p>
 
The 10% is walk away money.....sort of like when you lay people off...you make them sign a release before you give them there severance pay........it gives the person leaving the property incentive to leave it in good shape with the hope of getting a better price at auction.......also getting the 10% gives a legal release.
 
<p>Sorry, I think that's worse. A lot of people in trouble put nothing down and have zero equity. If they bought a $750,000 home they couldn' t afford, not only have they been able to live there for months without making a payment, they would also get $75,000 (or $50,000, or whatever) just for moving out within 2 weeks? </p>
 
Daedalus,,





Work out deals have nothing to do with right or wrong......they just make the problem go away....thats what happened a bear-stearns......the fed actions made the problem go away..........the recipients of the 10 % don't deserve it but at least they would leave the property peacefully and move on with their lives......most likely these types of people would go out and blow the 10 % and be broke in a year or two anyway.........at least they would stimulate the economy.
 
<< most likely these types of people >>



Apparently, one needs (1) a down payment; (2) a year's worth of living expenses and (3) perfect market timing to not be a "these types of people."
 
<p>Not a bad idea Nano, but you do realize that foreclosures are state law, not Federal, so even if the feds agreed to do this, you would have the mig law of 50 different states to deal with. And how would you deal with stuff like checking title and liens? I suppose in California a trustee's sale eliminates liens? Doesn't elsewhere, unless they are specifically listed in a foreclosure proceeding. And served with process.</p>

<p>But as a workout idea, you could do this if the banks and borrowers freely sighned up. The first few everywhere would probably go for extraordinarily low prices.</p>

<p>This might actually cause stuff to bottom out.</p>

<p>Sigh, but it'll never happen.</p>
 
LL





I agree on two points....





a) A program like this would allow the market to find the bottom very rapidly......





b) It will never happen.............





Instead of a plan that would clear the books and allow us to move on,,,,,,we will have 4 or 5 years of twisted grief, ugly new reports, and stories of woe.
 
blue.......



Real estate is like and old constipated man sitting on the stool.........giving it up in a very painful struggle..........at the rate it is going we will be on the stool for at least 4 years.
 
Good stuff. It would be very cool to see something like this happen, but unfortunately Nude is right on. We still wouldn't find the bottom rapidly, because there is still a critical mass of douchebags out there who think prices are going to be higher in the near future then they are now. People like that make sure prices are sticky on the way down. Economic bubbles are psychological events; it takes time for the message to get through.
 
<p><em>>>because there is still a critical mass of douchebags out there who think prices are going to be higher in the near future then they are now</em></p>

<p>Worse, some of those people are called "banks."</p>
 
I suppose I was mislead by the thread title. Giving 10% to deadbeat buyers is not fair. Maybe "fast solution" or "effective solution" would be more appropriate. The laws would have to be changed, as I'm certain more than a few would overstay the 2 weeks and require eviction, which is currently a lengthy process. Although I'm looking forward to buying a nice place when prices are reasonable, I'm content to let things unfold at their current trajectory. The GHB frustrated me for years, and now it's quite entertaining. My schadenfreude cup gets bigger every day.
 
<p>For fair, how about they all just split the loss equally.</p>

<p>If prices are down 30% from purchase and you put 10% down, and you auction it for 70% of previous value, the bank get's 70% of the 1st, the 2nd bank get's 70% of the 2nd, and you get 70% of the down or 7%.</p>

<p>If you put nothing down, you get nothing back.</p>

<p> </p>
 
NSR...



For a work out plan to be effective, everyone has to get something........without getting some compensation people will drag their feet....it is not fair but it gets people moving....when a company gets too fat, they pay off the useless workers to "go away"....this is the same sort of thing.
 
<p><em>"For a work out plan to be effective, everyone has to get something........"</em></p>

<p>What do I get?</p>
 
<p>awgee,</p>

<p><img alt="" src="http://i179.photobucket.com/albums/w285/twistedsiblings/layouts2/animations/deliverance.gif" /></p>
 
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