Monday, January 28, 2008

National Spotlight! News Flash Regarding Home Building and Mortgage Loan Woes!!!

by Matthew Wood Thursday, September 7, 2007

Chances are if you have been watching the Evening News lately or reading the Newspapers, you have seen the recent headlines Blasted throughout the United States on the Mess the National Home Builders are in and the Mortgage Companies that have been funding their loans. Many of the home loans these Builders and Lenders have been writing have been with 100% financing, including allowable Closing Costs to be rolled in on behalf of the buyer. What is happening on a large scale is many of these loans are being foreclosed upon due to non-payment by borrower. On a local level, we at Macy Paige Realty have seen many cases where these foreclosed properties are accumulating in suburban communities throughout the Dallas Fort/ Worth Metroplex here in Texas. As a result of these issues, many of these builders and lenders have been forced out of business. What is also happening is that these types of loans are no longer available, which in time will force these builders and lenders to write more qualified loans with higher credit scores. Realistically, very few people have that perfect type of credit scores and many are over extended already, which keeps them from being able to pay the credit issues off.

Short Term Solution

We, at Macy Paige Realty, have positioned ourselves on the front line working directly with some of the larger National Home Building Companies on a local and State level in Texas to try to move and close this inventory with Qualified Investors, who have the ability to put down large down payments and carry the property on a conventional loan allowing our tenants to move into the home and pay a manageable lease amount on these homes that will produce positive cash flow for our investors, allowing these tenants, many of whom were originally qualified for these new homes to move in and pay rent until they have worked out the credit issues keeping them from getting their own financing. Many of the lenders that are out there have specialists that deal directly with debt issues that are keeping these prospective buyers from getting a home loan. By having qualified investors that are purchasing these homes and allow the tenant the time needed to get qualified, it is virtually a win for all parties involved.

The Catch

In order for our Investors to step forward on these properties, the builders are being forced to give Huge Incentives and Significant Discounts to entice them to the table. The discounts and incentives are sometimes as high as 30-40k in the market we are targeting. This process allows the investors to purchase the home at a great price and when the property is ready for resale to the tenant or open market, the homes can be sold at the appraised value at the time the new buyer is qualified. We do believe this is a short-term problem that the largest of these Home Building Companies and Lenders will survive through to a see a better day. We want to focus on not only buying these available homes with our investors, but also the purchase of the remaining vacant lots that can eventually be built upon. This will give a significant position of control to the investors buying these homes and sitting on these lots, insuring that the homes being built on those lots are of a higher end product, drawing the appraisal values of the other remaining homes throughout the various developments. Between right now and the next couple of months, it will be a feeding frenzy for qualified investors looking to get a piece of the action. We at Macy Paige Realty are involved directly with several Large National Home Building Companies that are allowing us to liquidate their inventory. We also have several Lenders that have Fantastic Financing Options for Investors with Great Credit and some Down Payment Money! In some cases, as little as 5% out of pocket!

--Matt Woods contributed this article.

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