Foreclosures, Modifications and Excess Inventory
After reading the Sunday papers, I was thinking about excess inventory. At the same time I was watching a news show. I know, a real bad mix to start with. I began wondering how much our Government tells us, and what they hide from us. I started to wonder if the banks are doing the same thing again, to provide false hope of an economic recovery any time soon.
If you read the papers or watch the news in Southwest Florida, all you hear about these days is the number of homes in foreclosure. If you read the weekend newspapers, you hear about how things will be better when the inventory of homes on the market dwindles and buyers start to pick up. Well, I have one question: How does the foreclosure rate and modification rate factor into the inventory rate.
It is simple to say that all the 28,000 to 31,000 homes in foreclosure will one day fall into the inventory column, but we don't know when. For example, I represent hundreds of homeowners who have surrendered their homes and investment properties because of the current economy. Some of these homes went into foreclosure and stalled out and some haven't. Are they considered in the excess inventory if they are still in the homeowners name? No, I don't think they are calculated in. Likewise, let's say the bank finishes a foreclosure, but doesn't immediately list the property. Is this in excess inventory? No, I don't think it is.
What about the homeowners out there living in quiet desperation attempting to get a modification. These are the people who are liquidating their 401K plans, IRA and maxing out their credit cards to survive. This is probably the largest segment of the market that I am speaking about. Are they in the excess inventory statistics? No, I don't think they are.
What about the homes that the mortgage companies are not foreclosing on yet? For some reason or another all homeowners who are delinquent are not in foreclosure yet? I have many clients who have been living in their homes for 6, 7, 9, 10 months before a foreclosure starts. They cannot afford to pay the mortgages and are waiting to be told they have to leave. Are these homes factored into the excess inventory statistics? No, I don't think they are.
When you look a little deeper at the real estate problems in Southwest Florida, you begin to realize that the problem is much bigger than what we are being told or lead to believe. I hate to say it, but even the ever optimistic real estate agents in town must know that these homes should be included in any excess inventory calculations. The real estate agents I know are die-hards and their optimism should be commended. I believe they know the real story.
This post was submitted by Carmen Dellutri, Esq., founder of The Dellutri Law Group, P.A. Currently, the firm has offices in Port Charlotte, Fort Myers, and Naples and has expansion plans for Sarasota. Mr. Dellutri also sits on the Board of American Board of Certification. Mr. Dellutri is also one of the founders of the Bankruptcy Law Network, Debt Law Network, Credit Law Network, and Mortgage Law Network. Mr. Dellutri also writes for the firm's personal injury litigation blog.
