In a never ending quest to repair all that is broken with America's housing and real estate markets, the federal government is riding to the rescue once again. For those who are confused or just plain unaware of the ever growing number of housing market rescue programs, perhaps a recap is in order. In less than one sweet short year, the federal government has offered the following new taxpayer funded incentives:
- Money to buy a home (home buyer tax credit)
- Money to stay in a home (HAMP/HAMP2)
- Money to leave a home (NY Times)
To bring the various parties to the table — the homeowner, the lender that services the loan, the investor that owns the loan, the bank that owns the second mortgage on the property — the government intends to spread its cash around."
Those "in the know" when it comes to real estate are well aware of the precarious nature of short sales and their abundant potential for shady insider dealing. The proverbial icing on the cake for the new government program can be found in the devilish details:
"Short sales are “tailor-made for fraud,” said Mr. Lawler, a former executive at the mortgage finance company Fannie Mae.
Under the new federal program, a lender will use real estate agents to determine the value of a home and thus the minimum to accept. This figure will not be shared with the owner, but if an offer comes in that is equal to or higher than this amount, the lender must take it."
Yes, you read that correctly. The NAR will determine what each and every short sale is worth, the owner will be kept in the dark, and the free market via foreclosure auction will essentially be held at bay. This new taxpayer funded program takes effect in your neighborhood on April 5th, 2010.
Note the closing paragraph on Page 2 of the NY Times article.