I can't believe a brick, 12-suite building has little or no value but that is the propblem. This East Cleveland property just needs a full rehab. The lender just wants to get whatever they can get at this point. We could ask how the property got to this point but the better question might be, Where do we go from here?

Interesting, taxes are 2 1/2 years overdue but the county has not filed a tax foreclosure. There is a notice on the door from the city asking the owner to care for the lawn but the weeds are over waist high.

What do we do with this property? Economics theory suggests that we need to allow the market to reclaim this property and return it to it's Highest and Best use. Easier said than done...

If you are interested in this foreclosed, commercial property, let me know. It is a great question what will happen here.

Tax Credit as Downpayment

HUD has been privately and publicly discussing how to use the tax credit, not just as a tax credit to lower taxes therefore effectively increasing homebuyer's income but also as a way to use the credit to directly buy a home. Well, it is official, qualified buyers can now obtain a second mortgage/bridge loan to 'borrow' the tax credit to be used as their down payment. Effectively, you can buy a home up to a little over $200,000 using an FHA loan with no down payment.

Further information is available at HUD's website: http://www.hud.gov/news/release.cfm?content=pr09-072.cfm


Of course:
FHA loans are infamous for being non credit driven and now they can be had with no 'skin in the game'. I'm guessing that most politicians won't claim that this is irresponsible & predatory lending when the government is sponsoring it. I should note, however, this was one of (along with many others) the many actions that caused the current real estate meltdown.

Cap and trade to kill real estate

Like many ideas, on the surface the Cap and Trade bill in congress sounds like a great idea. Who doesn't want to be Green, Save the Planet, etc.

But don't try to sell your home if it passes. You may need to bring your home up to current efficiency standards. This could be $20, 30, 50,000+ just to sell your home. And you thought the commission and closing costs were a lot...

In the Cleveland area, many suburbs have a Point of Sale (POS) inspection. The property must be repaired prior to sale to comply with the inspection. If not, the tedious, expensive process can be bourne by a buyer. Sure there is a stated goal of maintaining the neihgborhoods but the unintended consequences include lower values and more vacant homes for longer periods.

The Waxman-Markey Cap and Trade bill will make these detremental POS inspections look like a minor cough compared to the crippling pneumonia with which the real estate market will be plagued.

On the surface, this may seem like a good idea but the consequences will be far reaching and will further hamper the already deteriorated real estate market. Many Realtors are leaving the industry now, this will escalate the problem. Just think about the cause and effect before you cheer this plan...