Short Sale Blog

Here is the latest short sale news at Seattle Short Sales. We assist hundreds of Seattle area homeowners with short selling their home and avoiding foreclosure.

Market Based Housing Solution

Ross Kilburn - Friday, May 01, 2009
The Ford Foundation has announced a plan to invest $50 million in a trust that will buy foreclosed properties directly from national lenders and then redevelop the properties.

Leon Urbinas, Ford's president was quoted as saying. "It's risky, but only a market-based solution is going to work to clear what is likely more than $1 trillion in real estate. Someone has to step up and put the risk capital in play that will come up with a model for that marketplace solution."

The reason I wanted to bring this up today, is because the Ford plan is exactly what we are doing right now with our business model. We invest our capital into distressed properties in order to redevelop them and get them ready for new owners.

The main difference between our model and that of the Ford Foundation is that they want to buy the houses after the homeowner has lost them to foreclosure. In our business model, we purchase them before the homeowner loses it to foreclosure, and we help save the credit of the homeowner. 

When a homeowner is able to successfully sell their home prior to the foreclosure date, they are eligible to purchase another home after just two years. If they lose the house to foreclosure, they have to wait five years. With 4 million more homes headed to foreclosure in the next couple of years, it would be better to help the homeowners save their credit and be able to purchase another home sooner that later. Excluding those millions of potential buyers from the marketplace will only prolong the housing recovery.

By purchasing the home from the homeowner, we are able to maintain a higher value for the property, by preventing it from suffering from blight and neglect if it ends up in the bank's REO portfolio.

I believe that our business model is clearly the most advantageous to all parties, including real estate agents, lenders, homeowners and community members.

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