Successful Developments: Yours & Mine

Monday, July 28, 2008

Real Estate - What is being said and done about the Situation


The current real estate market and condition of the economy is a hot topic of discussion in most every publication you find.

Everywhere you go, you hear people talking about it... heatedly.

I'm sure you have strong opinions about the situation as well.

It seems as though everyone is pointing fingers at everyone from the government, the stock market, the banking industry, the appraisers, to the people who signed mortgage papers, to the construction workers and material expenses.

Then there is the issue of the natural disasters and the insurance companies who everyone gambled would be there to rescue them, but were greeted with attorneys who were hired with the money you expected to receive to get your life back to normal. (I'll save the insurance issue for a future blog post.)

I'm not going to point any fingers at any one cause of this situation. However, I will point you to a few bits of insight I've found on the internet and add my three cent solution for a partial correction that I have not heard anyone mention.

First off... I read in yesterday's Mobile Press-Register: "Landmark Housing Legislation - Homeowner Rescue Passed by Senate; Bush to Sign it - Some 400,000 people will be enabled to refinance into easier U.S. Backed Loans."

Homeowners are happy about that news... but keep in mind that all of us have paid taxes into the federal government and are paying for this (yet another) bailout in an already strapped economy.

I'm not going to explain the details of what is written in the legal papers in D.C. but you can view the details by entering H.R. 3221 in the "Search Bill Text" box at the Library of Congress web site to read it for yourself.

While the U.S. citizens are waiting for H.R. 3221 to jump through all the government's legal hoops... there is an organization called "Hope Now" that you can contact when faced with possible foreclosure.

However, if you have already lost your home to a foreclosure... the IRS has decided to get step up to take some of the sting out of your taxes. Just go to the IRS web site and enter Foreclosure Tax Relief in the search box at the top of the page to find out what the IRS can do for you.

Of course, you might be looking at this situation as being an opportunity to increase your real estate holdings and profit from other people's misfortunes.

I'm not going to tell you where you can find opportunities (at least not in this particular blog article)... you can do that task on your own.

And... according to how you present yourself to the people who are losing or have lost their family homes... you may be viewed as anything between a White Knight in Shining Armor to an Evil Demon from the Depths of the Underworld.

Then to make matters worse... (as if that could be perceived)... President Bush was caught on camera during a private fund-raiser on July 18 in Texas talking candidly about the current economic condition.

Most everyone was laughing and joking about the situation and what the President was saying about Wall Street real estate strategies and practices leading up to the economic downturn and adjustment.

Remember when you view this that behind every joke there is a serious fact behind the laughter. Make sure you take a look for yourself and listen to the words President Bush used and the meanings behind them. He actually says quite a bit when you read between the lines and words he chooses.

You can get involved by voicing your concerns in your local newspapers, activity groups, special interest organizations and every on-line resource you have an interest. But before you speak... review the facts. Do not repeat what others are saying, speak your own words.

When you visit the federal government web sites I've listed above... look for the sections that ask for your opinion and involvement. Then take the actions you believe will lead to improving your life and the lives of others you know (and do not know).

Oh... I did mention that I had a suggestion that may help in our economic recovery... it is simple.

As most of us know... the federal government requires banks to maintain a certain percentage of their patrons' cash to remain liquid and are prohibited from using that percent of their holdings in their normal investments.

I say that the banks should be given a sliding scale as to how much money they should be prohibited from investing. Financial institutions with the most defaults should maintain a greater percentage of liquid assets than the financial institutions with the lowest defaults.

I am not an attorney nor am I an accountant, but to me... this seems to have a built in success factor.

Quit playing the blame game and let my readers and me know what you would (or will) do to improve this situation.

One last thing... make sure you base all your financial decisions on logic and not emotions. Make sure you do not agree to a loan that you can not prove is within your budget. Don't take chances on your family's security and comfort.

Until next time...

Consultant Girard Frank Bolton, III.
The Developers Advocate
Advocating the Improvement of Personal, Business and Social Development

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