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Now on to our real estate investing educational arena …
Moving Van/Relocation Incentives & More…
As the Obama administration attempts to short up short sales by providing even more incentives to banks, broker and even homeowners some are saying it is going too far. One item in particular seems to have spiked the ire of critics claiming the administration is acting out of fiscal irresponsibility by bribing former homeowners out of their homes with a $1,500 cash subsidy to assist with moving expenses. Advocates point out the very real need – and cost – associated with relocating including the rental of storage space, moving vans, utility hook-up and other necessary expenses associated with a change of housing.
Additional enhancements and incentives to the Making Home Affordable program include $1,000 to banks or brokers that sign-off on short sales; designed to encourage more expedient closings, it’s unclear whether the additional incentive will assist in reducing the time of approvals since without strong verbiage targeting closures dates. Current approvals average six months or nearly triple the typical time required for standard transactions – under the new guidelines, lenders must accept or deny a short sale offer within ten days but actual closing remains less concrete.
Due to take effect by next April, others argue it is too little too late. Even more confusing is the upcoming Congressional proposal that allows homeowners to remain in foreclosed homes as renters even after the bank has taken back the property. It appears to contradict with the MHA program goals of increasing short sales by providing an inverse incentive for default minus the consequences.
So, are the new incentives a futile practice of fiscal irresponsibility, a much needed benefit to distressed homeowners or simply a drop in the proverbial bucket unlikely to make little meaningful difference? It all depends upon who you ask. Certainly distressed homeowners across the nation feel left-out of meaningful assistance provided by the big bail-outs; research seems to support these claims as only a fraction of eligible homeowners have benefited from any programs with millions more not even reaching minimal requirements to apply for assistance. Providing cash assistance for moving expenses benefits banks and short sale investors as well as the homeowner with necessary needs. On the other hand, continued reforms increasingly seem to contradict one another with little to no oversight on how funds are actually used. Critics claim the cost far outweighs the benefits to all involved.
Bottom line for short sale investors – let it work for you while it’s available but don’t count on it to be there for the long term. Think of it as a small boost for you, the homeowner and the banks as the bottle-neck of short sales are worked through.
See you at the top!
Chris McLaughlin
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All Rights Reserved.
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About the author:
Chris McLaughlin is widely known as America’s top
Real Estate Attorney and Investment Consultant.
* As the top Florida foreclosure and pre-
foreclosure expert, he oversees more than
100 short sale & REO closings each month
* Long-time authority on real estate investing
and rapid reselling of distressed homes. Owns
portfolio of nearly 100 high-value, high-profit
properties
* Owner of one of Florida’s largest Real Estate firms,
running 4 different offices, supporting over
400 agents, uniquely positioning him to help
thousands of investors make money in the
biggest market opportunity ever!
* Highly sought-after speaker, consultant, and
seminar leader for current trends and hot topics
in Real Estate Investing, Entrepreneurship, and
Wealth Building
* Follow me on Twitter: http://twitter.com/mclaughlinchris
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