Real Estate Guru Predicts Market Crash-Now has Creative Solution to Fix It!

    MIAMI BEACH, FL, February 29, 2012 /24-7PressRelease/ -- CNN/Fox News Real estate expert Robert Shemin provides creatives solution to stabilize housing market and get the economy back on its feet!

A year before the real estate crises I called it! No one would listen to me and here we are. Well, no use crying over spilled milk. Big problems demand creative solutions.

Neither the banks nor the government have been very creative. Their programs have been dismal failures. Just talk to anyone who has tried to do a loan modification or a short sale.

The banks are sitting on tons of bad notes and foreclosed property while people have spent one to three years in houses without making payments.

Until this housing crisis has been resolved the US economy will just limp, crawl and stumble along without really ever getting up and going again.

The question and the solution are the same: Who should take the biggest hit and who should profit the most from any gain?

Why would someone who has been making payments on their upside down homes be penalized when someone who is not making payments gets a reduction in principle?

Moral Hazard gets you by, while people who are not making it into the " financial distress" category are just dangling along until they finally get there too.

Foreclosure is a "lose" for everybody and a few short sales just don't cut it.

I believe the best solution is a hybrid. The government announced that they are going to turn a lot of distressed properties into rentals and sell to investors. As an investor this is great news, because now investors can take advantage of homeowners and the bank's distress and perhaps make great profits. Good for us but a lot of people are left behind. The answer again would be lease with an option.

Let the banks work out an affordable lease with an option to the current homeowners. Let the bank and the homeowner participate in any potential future gains. Who knows if or when the markets will come back. If it does, the home owner has an option price and therefore any potential gains or losses could be shared by the home owner and the note holder.

Let me give you an example:

Let's say Jill and Bill have a house they bought 6 years ago for $400 000.

They borrowed $400 000 and got a $400 000 dollar note with "country slide mortgage company". Now the house is worth $275 000 but the note is still $395 000. The payments are $4000, which Jill and Bill cannot afford.

The choices are to do a short sale of $275 000 and the bank loses. The bank could foreclose at a cost of about $18 000 and now have a vacant house on their books where no one wins. The homeowner's credit is destroyed and the bank now has a bigger vacant foreclosed inventory, which is what caused a lot of our economic woes in the first place.

I recommend a creative solution:

The homeowner and bank can work out a lease with an option. They work out an affordable payment, perhaps $2800 a month, with a portion going towards the purchase price. The home owner agrees to do some or most repairs and they get an option for 3, 5, 7 or 10 years, depending on when the experts think the markets will come back at perhaps $350 000. Therefore the bank would only lose $50 000, not have a foreclosure and not have a vacant home. The homeowner has an incentive to pay and stay, hoping that the market goes up. These numbers are just examples and the bank and homeowner and government could negotiate to divide the winning or losing pie however they like. This would save money, time and definitely stabilize a lot of the housing market.

How come the banks or the government are not doing it?

That is a mystery that I cannot solve. However a lease purchase or lease option would solve a lot of problems and save a lot of money for a lot of homeowners, banks and the government.

Just call me if you need me to help with the details, the banks, government and homeowner or we can just continue to throw away billions of everyone's dollars...

For more information visit www.robertshemin.com

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