Posts Tagged ‘Short (finance)’

9 News Report on Roxane Webster and My Home Team

9 News experts Roxane Webster and Jake Gienger discuss Foreclosure, Loan Modification and short selling


Who are losing their homes?

Jim is a dental student, married with two young children.  While attending school in Denver he bought a modest starter house, intending to sell when he started his residency after college.  When considering this plan, they did what responsible young people do.  They sought the opinions of parents, friends and financial advisors.  All of advice they received was the same.  “Buy a house.  Don’t take any cash out of it.  With double-digit appreciation you can’t go wrong.  At the end of 4 years, the house alone will have gone a long way toward paying for dental school”.

You learn a lot about the financial habits of your clients when you are a realtor.  You learn even more when you are a realtor working in short sales.  In the time it took for Jim and I to complete the listing documents, Cindy had gathered up all of the financial data that I needed.  This is not a small pile.  Tax returns, bank statements, pay stubs, on and on.  The point is, these are financially organized people.   Not the image that some folks have of a couple losing their house.

The house had lost half of its value in four years.  They bought using a down-payment assistance program that doesn’t allow him to rent the house and they are too honest to cheat.  They can’t stay in the house and weather the storm, hoping for values to return.  To do so would mean postponing Jim’s residency, getting a job in this market and changing the whole planned course for he, his wife and two young children.

They will move, work on rebuilding their credit, and hope that the lending crunch has eased by the time he is ready to open a dental practice.  A couple who had impeccable credit will then have mediocre credit which means a higher interest rate on the loan to open that practice which will increase Jim’s overhead.  That means less money to put into the growth of his business.  Less money put into his personal budget. Less money to put into college funds for his children. They’re smart. They work hard, live within their means and are organized.  Clearly, they will recover from this crisis, but the trajectory of their lives and plans has been forever changed.