Sunday, June 27, 2010

A close-up and personal look at housing collapse

Hollis R. Towns, executive editor of the Asbury Park Press, writes about a second home he has in the Atlanta, Georgia area. He's trying to sell the home and things aren't going well.

"I've always understood Main Street's frustration with the Obama administration and the bailout of Wall Street. The fat cats were made whole and the little guys were left trying to hold on. But you never really understand an issue until you are affected by it."

Mr. Towns found a buyer for the house, the present tenants, but problems arose with the appraisal.
"It was for $90,000 — $44,000 less than the list price of $134,000 and $34,000 less than the payoff amount. This, for a 3,500-square-foot, six-bedroom Cape Cod with a finished, walk-out basement, screened porch and bonus room, all on nearly an acre of land in a drop-dead gorgeous, old neighborhood."
The culprit is the undeniable fact that the house was located in a neighborhood full of foreclosed homes. Prices on those homes are, by necessity, depressed. That, in turn, impacts the value of homes where the owners have made every payment on time.

The lender was of no help--suggesting a "short sale" that would impact the owner's credit report and possibly have terribly adverse income tax consequences.

Read Mr. Towns' column.

[Note, I wrote to Mr. Towns in order to get more facts surrounding his original acquisition of the property; was it as his home or an investment property, and why he didn't sell the house when he moved. As of July 1, I have not received a response.]

If you have questions about what you see here,
contact Stephen M. Flatow

StephensTitle AT

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