Jason Bernabei, TriCastle Realty
DEL MAR, March 5 2012 – Gooooood Monday morning SUN Diego!!! What a gorgeous, warm and sunny weekend! Just another reminder why San Diego is the best place to live, buy, and INVEST in. America’s Finest City indeed! Where the first weekend of March feels like the 4th of July! While I may be in a sunny frame of mind due to, namely two consecutive quarters of national job growth, and multiple other factors that are moving housing in the right direction, the National Association of Realtors is not so hot on news on the foreclosure front.
The Real Estate-Owned (REO) Initiative pilot program issued forth by the Federal Housing Finance Agency (FHFA) is laced with processes and bureaucracies like any other government operation. That much is not a surprise. NAR finds particular fault with data that speaks to the presence of foreclosure inventories in states that require judicial proceedings versus states that do not. NAR cites statistics that detail foreclosure inventories to be approximately 2.5 times higher in the judicially-mandated states.
Additionally, NAR brass finds fault with REOs that are converted to rentals as detailed in FHFA’s Initiative. NAR President Moe Veissi had this to say: “As the nation’s leading advocate for homeownership and housing issues, Realtors® support efforts to reduce the high inventories of foreclosures, but all real estate is local and we are concerned that REO-to-rental programs are not necessary in some areas and could even hinder the recovery.” She went on to conclude: “In many communities REOs are already moving well through the normal processes, so we can urge caution when proceeding with a rental program.”
While I understand the sentiment of keeping things moving at a good pace, isn’t a better position to take: “Let’s not make the process any slower?” And here we have again, the sphere of politics rearing its omnipresent head. Go right and you have the big, scary bureaucratic Federal program that slows everything down even further. Or, go left, and you see the correct forms of governance and regulations taking place to ensure the security of all involved against this problem worsening, and/or from happening ever again.
One thing is pretty certain in my view, and that is that this country is likely to see more and more AND MORE strategic mortgage defaults in the next 2 years with more and more AND MORE bad loans coming to term. It is the new almost commonplace business model for folks who are underwater(only it’s now no longer a secret), or unsatisfied with their payment, even if they can truly make the payment.
So since politics are in play, and so are people’s self-serving business practices, I say that a little regulation can go a long way. We are living through the consequences of the preceding era of little to no regs. If the judicial states take a little longer, so be it. Let’s start supporting smart decisions that equal preventative medicine for housing, on the legislative and judicial side of things, and get this right again. OR we can put our eggs in the basket of bowing to the gods of moving business as quickly as possible with little to no regard for the lack of regs (or lack of obeying and enforcing said regs) that got us here in the first place. If foreclosures take a little longer, if inventory is a little higher in judicially-mandates states, so be it. Ms. Veissi, as one of over 1 million members of NAR: “The Voice of Real Estate”, I respectfully disagree.
Until next time, feel free to contact me, Jason Bernabei at jasonb@tricastle.com, and check me out each and every Monday on www.therealtyinsiders.com for more, and be sure to tune in to see myself, and our various local investors and rehabbers flip SD on “The Realty Insiders” real estate show, THE ONLY real estate show in town!
Jay’s Outlook: Partly Sunny
Jason Bernabei, TriCastle Realty
