SAN DIEGO, Sept. 18, 2009 (GLOBE NEWSWIRE) -- Barack Obama has yet to notice 'For Sale' signs haven't been lasting long in California; nearly every distressed property listing has multiple offers within just a few days. Spokesperson from National Association of Realtors(R) NAR Walter Molony said, "We are in a seller's market."
Could we be on the path of recovery, or is this just a hyper-inflated market created by the bank's monopoly on foreclosure inventory? Currently, there are four main institutional lenders remaining, two of which are consuming a majority of the business, Bank of America and Wells Fargo.
If supply and demand of local real estate is controlled by banks, how can we identify a true fair market value?
Two significant real estate booms have demonstrated a hyper-inflated credit market: in 1944 when the 100% financing VA loan program was introduced, the most recent, created from 100% financing Stated Income - Stated Asset (SISA) loans that didn't require income verification. In both instances a heightened demand was created by available credit, combined with a reduced supply, which lead us into two of the greatest American construction build-outs of all time.
Today, American homeowners owe much more than properties are worth; if this problem is not arrested, we could spiral into a 'contagious depreciation' market. Contagious depreciation occurs when neighborhood default properties deteriorate the value of your home and your self-preservation alarm says, "What's more important, cash or credit?" Owners tend to walk away; embarrassed, they vanish with little warning and many sell the appliances out of spite.
A recently discovered loophole allows homeowners to position themselves with leverage when negotiating with the lien holder. Some industry professionals call it a 'substitute mortgage'. Anthony Realty Group CEO Marian Anthony, who has pioneered this formula, says, "The ability to process these default sales in a fraction of the time is win-win for the clients, the bank and the economy's recovery, but we need to move fast." Compared to the notoriously long and painful short sale process that has traditionally occurred, Anthony has found a niche. Loss Mitigation negotiators call it a 'security pledge'. This acts as a separate instrument where money is collected and held in an escrow account, and then offered to the defaulted lien holder as a 'ransom demand' against the potential foreclosure. The idea is to get the lender to make each file a priority or get it into the 'escalation phase' as quickly as possible.
Currently, a web based software development solution is being created for the 'substitute mortgage' technique by Marian Anthony. "This system could be a cure for the housing situation," said Tony Saadat, former president of EOS International, a potential software development partner.
This will ultimately provide solutions to millions of home owners when demonstrated properly. Homeowners should know how to negotiate with the seller's lenders -- they must generate some consideration from the property, otherwise they are at a constant disadvantage.
The Anthony Realty logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=6018