Options to Foreclosure Fiasco

 

Welcome to my world!

 

I am launching this Blog to offer a forum for positive and proactive solutions to our current foreclosure problems in the United States.

 

Losing a home to foreclosure – no matter what the reason – is devastating.  Currently there are no effective programs in play to assist the family that has lost their home to foreclosure.  I predict that we will also see a second round of foreclosures continuing this downward spiral in many of the hardest hit communities across the nation.

 

 

Here are some basic facts -

•  70% (ish) of the families evicted in foreclosure are gainfully employed.
• These employed families do not qualify for Section 8 housing or other assistance programs.
• No local or state agency is set up to address the housing needs of these families
• They can afford a mortgage equivalent but not a double / triple reset, so they lose their house.
• Their credit is trash for the next 3 – 5 years
• Most have family pets
• They cannot get into apartment complexes - rules are: no pets, no smoking, no kids and most importantly, no bad credit.
• Houses are the logical place for these families
• They need 3 – 5 years to repair credit so cannot be transient.
• Get their furniture and pets moved with them and they are likely not to move each time the lease is up.
• Keep them in the same school district and they will really stay put – for the sake of their kids .  

At this time in history, most single family (house) investors / landlords are new to the Real Estate game. 

• Many new  real estate investors are buying houses with a buy / hold business plan for 3 – 5 years, with the intent to sell for profit at that time.
• Some are so inexperienced in property rehabilitation they are losing the home to foreclosure before the property can be rented or sold.
• The new investors are not as savvy about market conditions and are purchasing in neighborhoods that will (realistically) take more than a decade to recover in value if no program is in place to stabilize the community.
• The huge increase in investor activity in the hardest hit value neighborhoods are transforming these communities to tenant occupied rather than owner occupied.
• “Rental” communities usually take longer to increase in value and quality
• The landlord may not realize a profit - other than his monthly cash flow – when his plan dictates selling the property.

The result is a second wave of foreclosures and / or landlords who become embittered (the new slumlord) as they realize their dreams of profit and time were optimistic.

  

As you can see the potential for further destabilization of Communities could be a reality in the near future.

 

I have worked on developing a Post Foreclosure Program -  a whole-kife grass roots solution-  and hope to stimulate a movement across the Nation to take back the middle class American Dream of secure home ownership.

 

In a real sense, I have created a new product, one with potential to rehabilitate and create sustainability in communities without pushing out the low to middle income families to “gentrify” the neighborhood. (That’s Phase Three of the PFP). 

 

I believe rebuilding our neighborhoods and re-empowering the low to middle income families with secure home ownership can be accomplished in relatively short order at a grass roots level and up.  This translates to less cost for the Government and for the Banking Industries.

 

Feel free to add your two cents worth.

 

Best Wishes,

Penelope Zeller

Real Estate and Business Development

Denver