Remember when we talked some 18 months ago about how established credit ratings would have to come up with a new model for the future? Well it seems to sink in that with so many good credit worthy people falling into foreclosure, repossessions and bankruptcies, the credit model going forward will have to be revamped, if we are to have large item sales based on lending in the future.
I read an article just today that gives a new twist to Fannie Mae backed mortgages which I think is just the beginning of new models to come. Fannie is offering to anyone who is willing to give up their home to a “deed in lieu of foreclosure” or short sale, an opportunity to qualify for a new mortgage in just two years.
Our current real estate situation is about the same, I don’t see much movement in a positive direction here in Florida, even though there are those who say they see a turn around. I guess it is all about what rose colored glasses you are wearing at the moment and depending on where you are located. There are more and more foreclosures hitting the market each and every week and there are now more than 6 million Americans who are not paying their mortgages anymore.
Once again I want to remind you that with every foreclosure and short sale you see in your community you are loosing value in your own home. If you are not under water now and have a traditional mortgage, chances are you will be under water soon.
So is Fannie and Freddie encouraging people to walk away from their mortgages, or for once are they seeing the writing on the wall and see a form of barter as a potential to revalue real estate?