In Business Since 2001 We accept Paypal
Home Article Directory
More from Bill Platt
"Bill Platt for Book Authors" Youtube Channel
Training for Book Authors
Other Resources for Book Authors & Publishers
FictionPlots.com (350+ Plots & counting)
Please Support Our Advertisers

 
D9 Hosting


Buying And Selling a Home During a Credit Crunch

Copyright (c) 2009-2023

As President Obama is taking office, many people who had hoped to buy a home in 2008 or 2009 are stressing as to whether a bank will be found, which will finance a home purchase.

The TARP bill (Troubled Assets Relief Program of 2008) was intended to secure bad assets in our banking institutions, in order to permit banks to open their vaults once again and issue new loans. Four months down the road, banks are still holding onto their cash in a miserly way.

Contrary to most Americans and my fiscally conservative roots, I supported the passage of the TARP bill. I honestly believed that once the federal government secured the bad debt on the books of various banks, the banks would start loaning money again for commercial loans, new car loans and home mortgages.

  • All around us, businesses are going under because they cannot secure the loans they need to buy inventory or to pay staff during the production cycle.

  • The automotive industry is suffering for two reasons, one because their cars don't get good enough gas mileage, but more importantly, because consumers cannot get auto loans.

  • Homeowners who need to sell homes cannot sell, because there is no one around who can get a home loan. Even those individuals with really good credit are having a hard time finding a bank, which will loan on a home purchase today, except in certain small pockets around the country.

  • For those individuals who have taken a new job in a far-off location, owning a home in two cities is a very daunting situation. But in the current real estate market, the owner of two homes has to consider letting one home fall to foreclosure, because it looks like the current financial crisis could continue for several more years.

  • The TARP bill passed, money was given to troubled banks, and we taxpayers got screwed. Along with many others - including the likes of Donald Trump - I was wrong. We underestimated the self-serving idiocy of the people who run our banking institutions.

    Instead of using TARP money to secure the financial well being of their banks, the banking managers bought competing banks, remodeled their bathrooms, threw extravagant parties and gave themselves huge bonuses!

    The credit crunch is still deeply entrenched in the United States and around the world. If TARP was unable to fix the credit crunch, I can only surmise that we will have a long and difficult, economic road in front of us all.

    But What If You Need To Sell A Home Now?

    Home sellers who need to sell a home now, and homebuyers who want to buy a home now, likely have only one option open to them, during this financial crisis. Interestingly, the option for home sellers and homebuyers is exactly the same - FSBO homes, or in layman-speak, For Sale By Owner homes.

    As a home seller, FSBO can seem quite scary, but it shouldn't be scary. As a seller, you have options available to help ensure that your buyer will stick to the path of righteousness.

    As a seller, it is important to remember that you have something that someone else wants. And so long as there is someone out there that wants to own your home, you have the leverage to ensure that you will get the terms that you want in the transaction.

    If you are wise, you will ALWAYS have your attorney review any paperwork in relationship to the sale of your home.

    It must be noted that many mortgages have what is called a "Due On Sale Clause" in the paperwork. In essence, what this means is that your bank or mortgage holder has the "option" to call the mortgage "due in full", when you sign interest in your property to a third-party. It should also be noted that if you sign a Lease With The Option To Buy with a third-party, and you do not tell your bank, then this amounts to fraud and is a federal crime.

    With the legal issues on the table and known upfront, we can go to the next step. The "Due On Sale Clause" in your mortgage paperwork is only an "option" that a bank holds in a property, to ensure that they get paid what is owed to them. Basically, that clause is in the mortgage paperwork to ensure that if payment to them stops, then they still have the right to evict the lessee and take over the property.

    BUT - and this is very important to realize - just because your mortgage has a "Due On Sale Clause" in it, does not mean that your mortgage holder will not authorize you to do a Lease To Own or FSBO agreement on your home. The Due On Sale Clause is an option that banks have, but banks do not always automatically take advantage of that option.

    You have to put yourself in your banker's shoes to understand why they would not force the "Due On Sale Clause" on your mortgage.

    If you still owe, let's say $60,000 on your $100,000 home, the bank stands to lose as much as $30 or $40,000 if they have to foreclose your home. When banks foreclose homes, they have to sell the homes as soon as possible at auction. But, homes typically sell at auction for as little as 20 to 40 cents on the dollar. So if you still owe more than 40 cents on the dollar against your original mortgage, chances are that the bank will lose a ton of money, if you force them to foreclose your home.

    Banks as a rule - and more so in the current economic crisis - are typically more interested in having the house "paid off in full" than forcing a homeowner into taking more drastic actions, like deciding to let the bank to foreclose on the property. More often than not, the bank will permit the FSBO arrangement, on the condition that they continue to receive all monthly payments on time.

    As a result, many banks will permit you to bypass the Due On Sale Clause, if you are willing to speak to them directly about the possibility. But, you have to open your mouth and talk to your banker, and then you need to get all of the legal agreements necessary to protect your interest and the bank's interest in your property.

    Talk first to your banker, then talk to your attorney and have the paperwork drawn up on a Lease with Option To Buy or other For Sale By Owner arrangement. With the appropriate permissions gained and the appropriate legally-binding paperwork in hand, you are now set to sell your home FSBO.

    In most cases, your buyer will lease your home on yearly renewals, and then the moment they can secure a bank loan of their own, they will buy out the lease, permitting you to escape the mortgage on that home and permitting them to transfer the property into their own name.

    Are You Seeking To Buy A Home?

    People, who are serious about selling their home now and not holding that home until the financial crisis has ended, have started to get creative about how to sell their homes.

    If you see a home listed as For Sale By Owner, chances are that the home seller has already taken the above-described steps to ensure that they will be able to sell their home now.

    So, if you have a down payment available and you want to buy a home now, it may be in your best interests to seek out FSBO homes in the area where you wish to buy.

    A friend of mine recently bought a quarter million dollar home under a Lease with Option To Buy agreement. Before the financial crisis, he had been waiting to find the perfect home, and in the current economic market, he was able to find the exact home he wanted to buy for the exact money he desired to spend on the purchase of his dream home.

    The best thing about the Lease with Option To Buy is that you are only locked into the home for generally one or two years at a time, and if you decide that you would like to secure a home mortgage after the banks have started loaning money again, then you have the option to pay the homeowner the amount of money owed to take full ownership of the home.

    We Cannot Afford To Wait Until The Banks Fix Their Mess

    With the TARP bill, it was assumed that the banks would take the money from the federal government and fix the broken credit system. Unfortunately, the bankers screwed us and only fixed their personal bank accounts.

    So, until the credit system magically fixes itself, we the consumers need to take matters into our own hands and get our own financial houses in order - no pun intended. If we are selling a home, we need to take action to get that home sold. And if we are trying to buy a house, seek out those people who are most motivated to sell you their home - look for that FSBO sign in front of the house or that FSBO ad in the newspaper.

    Let us fix our economic system one FSBO at a time, and maybe we will be able to shorten the financial crisis that our politicians seem unable to fix for us.




    About The Author: Shop Amazon - Top Gift Ideas
    Cory Shrader writes for the Liberty Home Sellers website. If you are ready to buy a home now, and the bank has tightened its credit policies, putting home ownership out of reach for you now, we might be able to help you. We buy and sell homes in north central Oklahoma. We offer owner financing on many of the homes we sell. Be sure to fill out the form on our website, so we can help you find your next family home. Learn more about available Oklahoma homes for sale at: http://www.LibertyHomeSellers.com

    VOTE ON THIS ARTICLE
    Needs Work >> 0 - 1 - 2 - 3 - 4 - 5 << Excellent Article

    Tell our authors what you think about their article.



    Top-Level Category: Real Estate Articles

    10 Most Recent Articles Written by Cory Shrader

    Home Financing in a Foreclosure-Heavy Market
    Written by: Cory Shrader | Distributed: 2009-02-24 | Word Count: 936 | Page Views: 4181 | Votes: 17 | Rating: 2.47
    Getting a home loan from a bank is becoming more difficult with each passing day in today's home marketplace. But, what if you have a good deposit now and you need a home now, not five years down the line or whenever the housing market picks back up? Do you have any options? In short, yes.

    Understanding The Due On Sale Clause On Your Home Mortgage
    Written by: Cory Shrader | Distributed: 2009-02-04 | Word Count: 1835 | Page Views: 7977 | Votes: 25 | Rating: 3.20
    The Due On Sale Clause is among the most frequently misunderstood and most-feared legal terms in American contractual law. In this article, we are going to take a look at what it is, what it is not, and how to avoid violating it.

    All of Author's Articles on this site:

    Most Recent "Real Estate" Articles

    Amendments to Construction Lien Law in New Jersey
    Written by: Steven Nudelman, Esq | Distributed: 2011-07-25 | Word Count: 1136 | Page Views: 5838 | Votes: 5 | Rating: 0.40
    Based on a report issued by the New Jersey Law Revision Commision, a revision to the Construction Lien Law was signed by Governor Christie in January, 2011.

    Saving Time and Money Working with a Real Estate Buyer's Agent
    Written by: Darrell Self | Distributed: 2010-05-06 | Word Count: 926 | Page Views: 4119 | Votes: 6 | Rating: 0.83
    Consumers interested in residential real estate too often make the mistake of answering a "homes for sale" ad rather than carefully hiring a buyer's agent to protect their interests and to help them make the best purchase for their needs, tastes, and finances.

    How To Buy Real Estate in Mexico
    Written by: Fernanda Rodriguez | Distributed: 2009-10-15 | Word Count: 1059 | Page Views: 4400 | Votes: 10 | Rating: 2.50
    Buying property in Mexico has become more popular every year. Whether you would like to purchase a vacation home or are planning on retiring there, owning real estate in Mexico is easy and safe. With its incredible natural resources, rapidly improving economy and modern facilities and infrastructure, Mexico is the place to make your dream home a reality. This article will answer most of your questions about buying real estate in Mexico.

    Tips About Vacation Villas In Chianti, Tuscany
    Written by: Teresa Cambi | Distributed: 2009-10-15 | Word Count: 512 | Page Views: 3602 | Votes: 8 | Rating: 2.25
    Travelers who enjoy wine, food, beautiful scenery and a relaxed pace will love Chianti. Not only is the region home to its namesake wine which is one of the most beloved and popular wines in the world, but it is also home to some of the most characteristic farmhouses and villas in Tuscany.

    Find The Right Property For Sale In Tuscany
    Written by: Alice Migliorini | Distributed: 2009-10-14 | Word Count: 529 | Page Views: 3696 | Votes: 11 | Rating: 2.36
    All the basics as far as real estate are essentially the same. If you are buying a condo in Miami or a property in the rolling hills of Tuscany you follow the same road. The road just meanders a little bit more when you deal with purchasing a house in Italy rather than the US.

    Sarasota Florida: Top Ten Reasons to Visit in 2009
    Written by: John C Allen | Distributed: 2009-08-04 | Word Count: 877 | Page Views: 4952 | Votes: 20 | Rating: 2.30
    An abundance of visitors from around the world visit Sarasota each year to enjoy all of the amenities this small city on the Gulf Coast of Florida has to offer. Each year, Sarasota's warm climate attracts "snowbirds" down to the Sunshine State for its high season from January through March. Visitors and residents alike enjoy the city's internationally recognized cultural amenities matching those of the nation's largest cities. A world-class destination, Sarasota, Florida has many reasons to live, work and play in this gorgeous coastal setting.

    Longboat Key Florida: How to Make the Most of Your Visit
    Written by: John C Allen | Distributed: 2009-07-30 | Word Count: 625 | Page Views: 5025 | Votes: 19 | Rating: 2.63
    Longboat Key Florida is an 11-mile long island that borders the Gulf of Mexico to its west and the calm waters of Sarasota Bay on to its east. The 8,000 permanent residents of Longboat Key live in a variety of residential styles from condominiums, townhouses, small single-family homes to luxury waterfront estates. While providing activities such as beachcombing, walking, swimming and fishing, the Key is manicured and secluded allowing a relaxing lifestyle. Longboat Key is known throughout the world for its outstanding beaches, sweeping water views, excellent dining, great weather, luxury lifestyles and don't forget the sensational sunsets.

    Lake Toxaway Homes for Sale - Your Dream Home Away From It All
    Written by: Alan Nilen | Distributed: 2009-04-30 | Word Count: 472 | Page Views: 3663 | Votes: 6 | Rating: 3.17
    Lake Toxaway NC provides quiet living away from it all, with natural beauty wherever you look. It's the perfect place to live, to retire, or just to own that summer home that takes you away from the hustle of your busy life.

    Buying Property In Italy On The Cheap
    Written by: Fabrizio Giglioli | Distributed: 2009-02-24 | Word Count: 511 | Page Views: 5185 | Votes: 9 | Rating: 2.11
    An Italian property expert offers invaluable tips on where to buy the cheapest properties in Tuscany.

    Home Financing in a Foreclosure-Heavy Market
    Written by: Cory Shrader | Distributed: 2009-02-24 | Word Count: 936 | Page Views: 4181 | Votes: 17 | Rating: 2.47
    Getting a home loan from a bank is becoming more difficult with each passing day in today's home marketplace. But, what if you have a good deposit now and you need a home now, not five years down the line or whenever the housing market picks back up? Do you have any options? In short, yes.

    Most Viewed "Real Estate" Articles

    FHA Loans- Affordability Solutions for First Time Homebuyers
    Written by: Jared Martin | Distributed: 2008-06-05 | Word Count: 1131 | Page Views: 9024 | Votes: 29 | Rating: 3.10
    This article discusses the features of the FHA loan, both good and bad, and presents the circumstances under which it’s a beneficial program to the homebuyer.

    Understanding The Due On Sale Clause On Your Home Mortgage
    Written by: Cory Shrader | Distributed: 2009-02-04 | Word Count: 1835 | Page Views: 7977 | Votes: 25 | Rating: 3.20
    The Due On Sale Clause is among the most frequently misunderstood and most-feared legal terms in American contractual law. In this article, we are going to take a look at what it is, what it is not, and how to avoid violating it.

    Is Downtown Condo Living For You?
    Written by: Lynn MacKenzie | Distributed: 2008-02-22 | Word Count: 462 | Page Views: 6369 | Votes: 10 | Rating: 1.70
    In the last year there has been an increase in the number of buyers moving into downtown condominiums. With the closeness of amenities and affordable prices it's easy to understand why buyers want to live in a condo for sale in Calgary. Many buyers see condo living as an attractive option because of the traffic congestion nightmares, the longer commuting times and the ever increasing construction of the Calgary roads.

    Residential Builders Need to Re-create the Leave it to Beaver Lifestyle
    Written by: Catherine Wilson | Distributed: 2006-07-31 | Word Count: 566 | Page Views: 6077 | Votes: 21 | Rating: 2.62
    Do you ever wonder where the neighborhoods went that held the picket fences, window boxes brimming with flowers, uniquely designed houses, sidewalks, canopied streets shaded with 100 year old oak trees, front porches, swings and homes placed close enough so that neighbors can be neighbors? In our fast paced, electronic, motorized world a simpler way of live is one that many desire.

    Finding Irish Castles for Sale
    Written by: Patricia G. McKinney-Lins | Distributed: 2009-01-20 | Word Count: 635 | Page Views: 5854 | Votes: 19 | Rating: 2.11
    It is possible to find an Irish castle for sale. If you are determined, patient, and have the resources, you can buy a castle in Ireland. If you do the research and are committed to the project, you can own a very special property!

    Amendments to Construction Lien Law in New Jersey
    Written by: Steven Nudelman, Esq | Distributed: 2011-07-25 | Word Count: 1136 | Page Views: 5838 | Votes: 5 | Rating: 0.40
    Based on a report issued by the New Jersey Law Revision Commision, a revision to the Construction Lien Law was signed by Governor Christie in January, 2011.

    Is Renting Better Than Buying, In This Economy?
    Written by: Mark Felder | Distributed: 2006-07-19 | Word Count: 315 | Page Views: 5316 | Votes: 10 | Rating: 1.80
    With the real estate market changing dramatically in the past few years and some regional markets more than doubling in property value, is it a good time to buy property? Consider the factors: real estate has increased in value while interest rates have dropped to record lows.

    Ten Questions to Ask Your Realtor When Buying a Home
    Written by: Craig Elliott | Distributed: 2007-10-10 | Word Count: 619 | Page Views: 5218 | Votes: 10 | Rating: 1.50
    When buying a home, the questions you ask your realtor are crucial. Your realtor is assisting you with an important financial matter, so you need to be sure that the decision is in your best interest. The following are ten questions you should be asking as you are working with a realtor or before you hire them to assist you.

    Buying Property In Italy On The Cheap
    Written by: Fabrizio Giglioli | Distributed: 2009-02-24 | Word Count: 511 | Page Views: 5185 | Votes: 9 | Rating: 2.11
    An Italian property expert offers invaluable tips on where to buy the cheapest properties in Tuscany.

    Foreclosure Property: Homes Up To 30 Percent Off
    Written by: Robert Wade | Distributed: 2006-09-13 | Word Count: 329 | Page Views: 5135 | Votes: 9 | Rating: 2.22
    The key to real estate investing is acquiring property for a low price and selling or renting for profit.

    Highest Ranked "Real Estate" Articles

    Why Parties Engage in Real Estate Litigation
    Written by: Austen Koberstein | Distributed: 2007-01-09 | Word Count: 712 | Page Views: 4434 | Votes: 8 | Rating: 3.25
    Owning a home is a big part of the American Dream. For many people, this will be their ultimate investment. Therefore, it is no wonder that homeowners do not blink twice when it comes to protecting their most valuable possession. These days, real estate litigation is to the property owner, what the mamma bear is to her cub.

    Understanding The Due On Sale Clause On Your Home Mortgage
    Written by: Cory Shrader | Distributed: 2009-02-04 | Word Count: 1835 | Page Views: 7977 | Votes: 25 | Rating: 3.20
    The Due On Sale Clause is among the most frequently misunderstood and most-feared legal terms in American contractual law. In this article, we are going to take a look at what it is, what it is not, and how to avoid violating it.

    Lake Toxaway Homes for Sale - Your Dream Home Away From It All
    Written by: Alan Nilen | Distributed: 2009-04-30 | Word Count: 472 | Page Views: 3663 | Votes: 6 | Rating: 3.17
    Lake Toxaway NC provides quiet living away from it all, with natural beauty wherever you look. It's the perfect place to live, to retire, or just to own that summer home that takes you away from the hustle of your busy life.

    FHA Loans- Affordability Solutions for First Time Homebuyers
    Written by: Jared Martin | Distributed: 2008-06-05 | Word Count: 1131 | Page Views: 9024 | Votes: 29 | Rating: 3.10
    This article discusses the features of the FHA loan, both good and bad, and presents the circumstances under which it’s a beneficial program to the homebuyer.

    Las Vegas Real Estate: High Stakes or High Gains?
    Written by: Mark Felder | Distributed: 2006-08-09 | Word Count: 243 | Page Views: 4171 | Votes: 12 | Rating: 2.92
    Las Vegas Real Estate has certainly become a buyer's market in recent months, especially for condominiums. Real estate investors grabbed property at just about any cost during the real estate boom this past year, boosting prices 137 percent over 2000 levels, states USA Today's Noelle Knox...

    Real Estate Investing: Real Estate - The Hidden Investment
    Written by: Robert Wade | Distributed: 2006-07-07 | Word Count: 303 | Page Views: 3985 | Votes: 17 | Rating: 2.88
    With REITs and 1031 Exchanges, real estate investing can be confusing landscape. But It's also a fun and challenging opportunity. What exactly is it, and why has it made so many millionaires in this latest boom?

    Closing on Your Home
    Written by: Clint Wooley | Distributed: 2007-01-08 | Word Count: 430 | Page Views: 4300 | Votes: 18 | Rating: 2.83
    The closing process of purchasing a home can be one of the most confusing parts. This article is an attempt to help first time home buyers understand the basics of the process to settle fears and anxieties about the process.

    Longboat Key Florida: How to Make the Most of Your Visit
    Written by: John C Allen | Distributed: 2009-07-30 | Word Count: 625 | Page Views: 5025 | Votes: 19 | Rating: 2.63
    Longboat Key Florida is an 11-mile long island that borders the Gulf of Mexico to its west and the calm waters of Sarasota Bay on to its east. The 8,000 permanent residents of Longboat Key live in a variety of residential styles from condominiums, townhouses, small single-family homes to luxury waterfront estates. While providing activities such as beachcombing, walking, swimming and fishing, the Key is manicured and secluded allowing a relaxing lifestyle. Longboat Key is known throughout the world for its outstanding beaches, sweeping water views, excellent dining, great weather, luxury lifestyles and don't forget the sensational sunsets.

    Residential Builders Need to Re-create the Leave it to Beaver Lifestyle
    Written by: Catherine Wilson | Distributed: 2006-07-31 | Word Count: 566 | Page Views: 6077 | Votes: 21 | Rating: 2.62
    Do you ever wonder where the neighborhoods went that held the picket fences, window boxes brimming with flowers, uniquely designed houses, sidewalks, canopied streets shaded with 100 year old oak trees, front porches, swings and homes placed close enough so that neighbors can be neighbors? In our fast paced, electronic, motorized world a simpler way of live is one that many desire.

    How You Can Benefit from All The Foreclosures
    Written by: Bob Johnston | Distributed: 2008-11-05 | Word Count: 957 | Page Views: 3808 | Votes: 13 | Rating: 2.54
    Foreclosures are at an all time high and people are getting scared. One look at the markets over the last few weeks will tell you the tale. Is it possible that a person could actually prosper in times like these? Are there opportunities in the foreclosure market that we are missing? It is possible; there have been many people who started their fortunes during tough economic times.











    Download an eBook today
     
    Directory Navigation
    Locate By Category:

    ALL Categories
    Arts & Crafts
    Arts & Entertainment
    Automotive
    Business - Offline
    Business - Online
    Career
    Computers
    Education
    Family
    Finance
    Food & Drink
    Health & Wellness
    Home & Garden
    Humor
    Internet
    Nature & Pets
    Real Estate
    Religion
    Self Improvement
    Shopping
    Society
    Sports & Recreation
    Technology
    Travel & Leisure
    Uncategorized
    World Events
    Writing & Speaking

    Change Number of Results:
    50 - 100 - 200 - 500
    Article Reprint Rights
    Creative Commons License

    This work is
    licensed under a
    Creative Commons
    License


    You are not required to show the creative commons license notice when you reprint this work.
    Article Statistics
    Word Count: 1580

    Total Views: 5737

    Article Rating: 2.07 of 5
    Votes Cast: 15

    More Articles By Author:



    Last Distribution Date:
    2009-01-27 14:00:00

    Internal ID: #6536





    All Articles are Copyright © 2001-2023 of the Defined Authors.

    All other material and images on this site are:
    Copyright © 2001-2023, ThePhantomWriters.com