The Global Financial Crisis and Real Estate (part 4)

The Global Financial Crisis and Real Estate (part 4)
Who knows how long it will take to sort out the financial part of sub-prime mortgage crisis and the real estate bubble. The bubble will take care of itself. There will be scars. There will also be some very good deals. The actual dollar losses to the failed mortgages have already been written down for the most part. When some money comes back on a lost cause, that will be positive for the financial industry. The real problem will be with us for many years to come.
The real problem is sub-prime properties and sub-prime borrowers. Many of the properties that were financed under sub-prime mortgages were really shoddy construction in really depressing settings. People who could not even rent a home from a diligent landlord were desperate enough to take these “blessings”. Much of the “cost” in these transactions went to pay off appraisers and mortgage brokers and give cash advances so the buyers could resolve old debts in order to qualify for the loans. Less than normal “cost” went into labor and building materials. This left a crummy house with no equity, which will remain long after the foreclosure is done.
Then there are the sub-prime buyers. There were many honest, quality type people who got sucked into this situation by crooked “professionals”. There were a lot of people who should have been left sleeping under the bridge. These people will need a lot of counseling and rehab before they are even qualified to rent a property much less own one.
Next edition will be on industrial property.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com