Housing Bailout Backfiring? Home Sellers Walking Away
All right well.. Look desperate, get dough. Why some fear the president’s announcement tomorrow to help those who can’t pay their mortgage will lead to deadbeats deliberately not paying their mortgage.
My next guest has already seen this, he’s Jeremy Brandt, CEO of the company 1-800-Cash-Offer.
What’s going on here Jeremy?
Well, like we talked about before Neil one of the things that we’ve seen happening fairly often now in the real estate market is home owners that have good jobs and can afford to pay their mortgages, intentionally going behind on payments and allowing the bank to start the foreclosure process so that hopefully they’ll get a bailout from the bank – or now it looks like the government.
All right so these are folks who are in good shape financially but they see this gravy train coming and they want on it. Right?
Sure. You know especially in areas like Southern California and Southern Florida where people have seen their home values decline, it appears that they’re not so worried it being on their credit if means they can walk away from their house or the government or bank is going to give them a big rebate for the lost value on their home.
All right. So if you’re deliberately skipping payments to qualify for something that will help people who are late on their mortgages essentially. Right?
Right. Well and this is the law of unintended consequences. When you have somebody’s neighbor that’s getting a big break from the bank or from the government because they lost their job and legitimately maybe need some help with their property. Somebody who has a good job looks at that situation and says well why am I still paying on a $300,000 home that’s now worth $200,000. I should get a little piece of that pie.
Incredible. This is where we go Jeremy. Thank you very much, appreciate it.