Would Realtors know? (insurance, foreclosure, borrower, loan)

[Georgia]

Question:

In the Atlanta area I have driven by multiple (putting it lightly) homes in foreclosure with the signs stating HUD HOME or HUD FORECLOSURE or HUD PROPERTY FOR SALE.

The question is:
Is HUD loaning high risk, low to no income groups money to buy large homes?

This is my delimma, the homes I pass are not your small ranch starter homes, some of these homes are 200 - 400K plus homes! I passed one in NE Gwinnett County that was 5 br 4.5 ba w/ a walk out basement, home was less than 1 year old, noticed the paper foreclosure, HUD with a 390k first payment default mortgage.

Not only is killing the market and your earning ability if it is true, it will eventually destroy neighborhoods.

Anyone else aware of this or can educate me?

[2bindenver]

HUD homes, are those that have been foreclosed by the lender, that used the mortgage insurance to cover their losses, and have been deeded to HUD to resell, often at a loss.

Remember the Resolution Trust Corp.? They were given the task of disposing of all the S&L properties in the 1990's.

Yes, it affects local property value. Yes, it effects local communities. Would it surprise you to learn it also effects China? They put gobs of money into mortgage backed securities. Hundreds of lending operations have ceased to exist. Thousands have lost their jobs, some have taken a second job to help make ends meet for the first time in 15 years.

There are dozens of industries effected by the housing market. Not just Realtors, lenders and appraisers...think moving companies, new appliance stores, now new curtains, or furniture, or trash service, no one home to pay the electric bill, or newspaper, no new hardwoods, or carpet installed, kids no longer in the neighborhood school...

Buyers claim ignorance of the loan rate reset. Lenders claim heavy losses. (The losses would be so much less, if they worked with the borrower and worked with the Realtor, doing a short sale.) The government claims a "quick fix" that helps no one. The resulting credit crunch will insure that those properties already foreclosed on will stay on the market longer, and the condition of the properties will deteriorate.

It's so sad. And entirely preventable. I could go on, but I think you get the point.

[Mary Rives Brown]

Thank you 2bindenver for the most concise and accurate summary of how this current foreclosure tsunami has its ripple effect on the world. It will be a test case to see how the world does in a global meltdown and we'll all be going to school on this one.

[Brandon Hoffman]

Originally Posted by 2bindenver

The losses would be so much less, if they worked with the borrower and worked with the Realtor, doing a short sale.

So very true, in trying to protect their bottom line they hurt it so much more and their borrower at the same time. Then when it does go into foreclosure that person won't be able to purchase again for several years best case scenario. I have felt like the lenders (some of them) were working against me on short sale instead of trying to help. It's almost as if they'd rather have it go into foreclosure.