We recently came across this timely article written by Amanda Okker, RE/MAX Times Associates Editor, and decided to share it with you because it highlights exactly the kind of things that banks need to do in this market to keep people in their homes. Enjoy!
Liniger Applauds Bank of America Plan to Help Homeowners
In his state-of-the-industry update during the live RE/MAX Town Hall Meeting on Oct. 8, RE/MAX International Chairman and Co-Founder Dave Liniger complimented a recent move by Bank of America to help people stay in their homes.
Bank of America has earmarked more than $8.6 billion to help 400,000 homeowners refinance their mortgages at a low interest rate and adjusted principal.
"If foreclosures taper off, demand will be there and people will get off the sidelines," Liniger said at the Town Hall.
Liniger wrote about the initiative in his latest "Dave's BlogStreet" entry on Mainstreet. An excerpt:
As a result of several lawsuits against Countrywide, Bank of America inherited the task of settling with attorneys general in 11 states (Arizona, California, Connecticut, Florida, Illinois, Iowa, Michigan, North Carolina, Ohio, Texas and Washington). The resulting settlement, announced this week, is a realistic strategy that offers a blueprint for other lenders and the government.
The objective of their plan is to pay the price for keeping American families in their homes and not add to the number of foreclosures in the marketplace. For 11 states, BoA will pay over $8.6 billion to resolve nearly 400,000 mortgages. They will lower interest rates, reduce principal and forgive penalties.
In the long run, the price for modifying these mortgages will avert many potential disasters. We cannot afford to have growing inventories, which only serve to reduce prices and equity. If the government dumps large numbers of REO properties on the market, millions of people would be displaced and entire neighborhoods could suffer a negative impact. My hope is that we can avoid such a disaster.
Throughout his Town Hall remarks, Liniger emphasized the need for proper pricing.
"Price is the first thing sellers want to talk about, but the last thing they understand," Liniger said.
Noting recent positive signs in the housing industry - such as national inventory decreasing in August and sales gains in some of the hardest-hit markets, including the West, where sales increased 18 percent in recent months - Liniger (ABR, CRB) suggested the market may have hit bottom.
He urged Associates to encourage the renegotiation of bad loans.
"Write your congressman or senator and urge them not to repeat the mistakes of the savings-and-loan debacle in the 1990s," Liniger says.
