As a result I see lenders in my market writing a different play book for financing homes with home drainage problems.

Most lenders are not going to finance a drainage problem anymore unless the hand excavated french drains are installed before closing of escrow rather than a band aid approach to groundwater problems.

A sump pump won’t stop groundwater from entering below grade areas like crawl spaces and basements even if they are mounted on the outside near the foundation wall. Especially if they are located within 10 feet of your foundation.

A sump pump installation is almost always the sellers quick fix way out during a home transaction without having to spend the money to do it right and collect the groundwater prior to it saturating the foundation area.

It is the buyers greed many times, evidenced by their desire to take a few thousand off the purchase price and buy into the idea that installing a sump pump will change anything at all, that will be their own undoing in time with respect to unsolved home drainage problems.

Lenders in the past were passive on the subject of requiring sellers or buyers to fix home drainage problems prior to closing of escrow and financing the home as they previously could package and sell the paper generated from creating notes against real property as easy as could be. They had no liability. If the buyers defaulted it did affect them one bit.

Currently around the United States alone thousands of home drainage affected homes are sitting off the market all together because the lender is just like the seller who will not do the correct repair and step up. They do the same thing. Those lenders say they have no cash to solve the home drainage problems either. Right! Now the federal government has agreed to take those toxic assets off the books of the banks and bail them out, some of which are homes with drainage problems preventing the financing of the home. Isn’t that special. Well guess what, those same properties will likely continue to sit there and devalue some more tearing down the overall market recovery even when the feds get them.

Most lenders have decided that they must take a more pro-active approach to letting sellers get away with selling a home drainage pig these days and are not allowing buyers to buy a home in that condition when the buyers just want the home emotionally and really do not see the home drainage problem as more than a gateway for them to work the sellers for a few thousand off the purchase price at closing.

The buyers do not really become the fall guy in this example, the lenders do. Formerly, upon sellers and buyers agreement per addendum on the earnest money agreement, the buyers would just take the property “as is” subject to the buyers acceptance of whatever would be agreed to be done to solve the problem, if anything at all, and the buyers would take the property with its home drainage issues not dealt with a pocket some cash off their underlying home mortgage balance. The discussion ended for everyone at the point of the calculation of money off the purchase price. Out of site, of out mind.

The buyers have pocketed the cash. Most of those buyers when turned into sellers will contend there never was a home drainage problem ever, and when it is discovered again, only worst with additions, they absolutely swear that they knew nothing about it as they attempt to pass on the problem to perhaps some young first time home buyer couple..

Until one day these current fall guy home owners find out that the new drainage bid is umpteen thousand and includes post-beam-pad replacement, foundation masonry work, major dry rot repair in floors, etc. Those are the sellers that will lose their shirts and bail out giving the home back to the bank and signing a deed in lieu of foreclosure if the lender will let them. When it gets that bad and the lender is burned, they will dump it with the problem this intact.

Most often in the past, many home buyers would look at some money off the purchase price as a down payment rebate of sorts. As a result absolutely nothing was likely installed to prevent the groundwater problem from happening. Time made the groundwater problems compound into other problems as well. Hand excavated french drains were not installed in this scenario as the lenders would not demand it, even though they would demand that a home seller fix a dry rot repair that was caused by the lack of proper home drainage systems installed. The system was ripe for change.

Time after time this saga has continued in many cases, resurrecting the same old plot of doing nothing and accepting home drainage problems designed for failure and getting some artificial reduction in some arbitrary home price for doing nothing. Real smart folks. As an example, I have been to the same home in a suburb of Portland, Oregon many times 2-3 years apart and watched homeowner after homeowner get stuck holding the bag out of their own bad judgement, while no one had the cash to solve the home drainage problem and the bids go up by thousands each time I look at the home damage and repair requirements.

Most homeowners survive and borrow there way out under crisis so the repairs can be completed and the home escrow closed, but not in a timely way and not without lots of changes.

When the dry rot repairs and the structural damage finally add up to big 5 to 6 figure bucks and that knowledge finally kills a future sale transaction on the home dead in its tracks without a large monetary outlay on the part of a seller, most often everything starts to add up for the sellers both literally and figuratively. The buyers usually walk away from this type of home when it gets that bad if a seller cannot present a home that qualifies for financing, cannot make the payments or does not want to, the game is over.

The buyers get their earnest money back when the earnest money agreement is properly constructed even if discovered after signing the earnest money agreement. The clause in most earnest money agreements that protects the buyers in this case says, ” this transaction subject to the purchaser and property qualifying for acceptable financing”. If there is no satisfactory resolution to the home drainage problem, the buyers gets theirearnest money back and the sale fails.

Home builders are some of the worst slip sliders on the installation of effective home drainage with hand excavated french drains and simply doing it right. I have come behind too many stupid builder tricks to not take a shot at their abilities with respect to home drainage.

Home builders contribute to the home drainage problem most often not because they do not know better, but because they want to save the dough times maybe 20 homes for example. That adds up to thousands of dollars per home to install hand excavated french drains for the entire subdivision properly and vent the downspouts correctly, as well as subordinate other interests of the site and home development to the necessity for home drainage health. Home builders often drop the ball on engineering slopes, compaction, and hand excavated french drain grade installation for quality home drainage results.

Many homeowners are in harms way right now seriously dealing with short re-financing time frames, pending foreclosures, new acquisitions that must by closed in a timely manner, and many homeowners and buyers are lined out with road maps for due diligence on where they need to go and how they need to survive the day with respect to keeping their home in a condition that will allow them to sell it quickly and getting a new home loan closed in a timely fashion.

If you have home drainage problems and are looking for a smooth home escrow closing you can throw the time table and projected closing dates right out of the window because everything will change. Home drainage problems, usually groundwater in the crawl space or basement, kills more deals than survive, that is for sure.

My advice to any homeowner with home drainage problems or home buyers wanting to purchase one, is don’t get caught in that squeeze. Read additional articles on this site about the buyers due diligence checklists for home drainage when buying a home and having professional home drainage contractors install hand excavated french drains on new construction as well as existing homes with home drainage problems.

Read about closing of escrow with drainage problems and other lessons on the prevention of home drainage problems as well as how to save the farm when everything looks like it is going really bad.

You will get out of this study course on home drainage exactly what you put in with respect to your interest level and ability to read and comprehend the material. If you are even moderately interested and have a particular need for the information, you will find lots of comfort and common sense that in the present and future you may use to assess the abilities of those around you who say they can get the home drainage job done right, as well as learn how to do it yourself with some help most likely.

Stop the groundwater from entering your crawl space or basement with hand excavated french drains.

These so called “toxic assets”, homes with drainage problems many times, are often homes with home drainage problems that have been known for a long time by the lender. If the lender is the seller, beware.

As a prospective home buyer on the market in a complicated market where everything is shop worn, please do your due diligence and study about the professionalism that it takes to diagnose and install groundwater removal systems that work well, and work for decades as well. Empower yourself with every day factual, working, common sense information available at AAA Home Drainage.com and do not become the fall guy for stupid lender tricks played on the public.

If lenders had to pay all that bank cash out to home drainage contractors around the United States, they would likely have less bonus at the end of the year, or perhaps not.
On the local market I see lenders doing nothing to solve the home drainage problems that are causing many of these groundwater damaged listings not to sell. As as whole I see lenders presently not spending any money because their bonus survival is more important.

During good times when it was a great real estate market and money was flowing, lenders completed many home drainage projects. In the past years I represented many national lending institutions as well as the Mortgage Guarantee Insurance Company, with whom I worked many times. While I understand that congress cannot manage these secretive lenders, mortgage packagers, hedge funds, the federal reserve, the treasury, investment funds and many other models of monetary manipulation that the public and business is subject to but until the lending industry is run specifically as a low profit or not for profit industry that is set up for the benefit of the public and not a private corporation bound to model their activity on how much money they think the community can afford to cough up.

I would not even think about buying a home from a lender without really knowing everything about home drainage, because they sure do not know jack about drainage from my perspective and personal experience over many years as a professional home drainage contractor.

I have seen many residential listings recently with home drainage problems listed by realtors that have outright told me that their client was a lender and they would not do any capital improvements to the extent of hand excavated french drains because they did not want to spend any money on the home period. They understand that it is what is required but they will not pay for professional installation and want to just get away with putting in a sump pump at sticking the new buyers.

Lots of broke lenders on paper. Yeh, broke lenders. What a laugh. Their assets are enormous.

Watch out home buyers. Some of these lenders and uninformed realtors are about to drop a load of home drainage problems on unsuspecting home buyers around the U.S.

Most of these home drainage challenged properties sit vacant for sale on the market around the U.S. listed with signs on them and no one interested. I wonder why. Not likely homeowners that know the difference are going to buy a mold problem in this market, or any market for that matter.

A lender as the seller should be a red flag to a home buyer. Ask the listing agent right away who owns the home, how long it has been on the market, and why the lender wound up with it. Most likely no answers will be available to service those questions if the future looks anything like the past. Beware of those lenders who are sellers. Many are trying to make stripes in their company by dumping bad assets on the market. A pat on the back for the smart good ol’ boy who dumped millions of dollars worth of bad toxic assets “as is” on the stupid public who doesn’t want them to have a fat bonus at the publics expense. That guy could be management material they are thinking. Those lender Dilberts are poster children for the movie, ” the blind leading the blind”, and that could star you too if you are not careful.

The extent to which the nation wide glut of home drainage challenged properties is affecting the overall real estate market in the United States is not known. It is not possible from a quantitative stand point to estimate it currently, but I would estimate it as huge. Probably in the multi-millions to billions itself by using the local market as a model.

Time rots and deteriorates structures and foundations that don’t have adequate groundwater removal systems installed that were designed for that particular site and grade. The plan is everything. Installation professionalism required. Safety experience required for safe operation.

Home drainage problems often occur where foundation soil grade is bad, window wells or foundation vents are below grade, trees with roots exist on the foundation, where spongy bark dust exists deeply on the foundation, where ingress windows exist without coverings, where rock, sand, or gravel is backfilled directly on the foundation allowing groundwater to run right along the foundation wall, and/or poor french drain work was done without care or knowledge by someone who just did not get in done.

Success with home drainage is a completely achievable goal for most homeowners if they do the right things in time before someone messes it up beyond help.

Home drainage challenged homes with home drainage problems almost always lack proper foundation grade, properly installed hand excavated french drains with exposed river rock and/or properly installed rain drain discharges or a combination of the above causes.

Lots of these home drainage challenged or damaged homes really should be bulldozed from a functional health and practical long term value objective, but the massive underlying loans existing on them cannot be paid off if the home were demolished.

Living in a home with mold and bad air can be a death wish for some homeowners and just plain bad for many. Kids are especially affected by mold problems.

If the home seems like a super deal, maybe it is, and then maybe it is a problem property that the bank just wants to treat like a pig with a new coat of lipstick.

Do not be the one to own that drainage pig.

Ask the listing agent if there has been any offers on the property, how long it has been on the market. Ask if there has been any price reductions, and why those former offers, if any, did not go through the escrow process and close. Home groundwater drainage problems may have been the reason for the escrow sail fail. It is quite common.

Even after a sale fail caused by drainage problems they won’t fix, the lender, the home seller is this example, may attempt to market it “as is” anyway and stash the cash frustrating the realtor to no avail.

Many times the listing agent will tell the buyers agent about the home drainage problems out of frustration with the seller who is a lender, the owner in this example, who has refused to do the repairs even after the bids were submitted. Lenders are among the cheapest of the cheap when it comes to being outright stupid. Penny wise and pound foolish as they say.

If that property looks too good to be true, maybe it is. Sheet rock covered basement walls hide the problem well many times from a unsuspecting homeowner who is caught like a deer in the headlights without a list of professional home drainage questions to ask while looking at the home from a structural standpoint.

Arm yourself with knowledge and walk with your eyes open.

Read articles on this web site about how buyers can direct the home purchasing process with checklists and due diligence performance for understanding home drainage problems while selling, refinancing or buying a home. Whom ever is asking the questions is really in control. Be that person. The one in control of the information gathering and who does it.

Protect yourself from lenders, many of whom are sellers with many homes on the market. These lenders are the largest group of homeowners with the most “toxic assets”. Typically the term “toxic asset” refers to the mortgage notes themselves instead of the quality of the home. It seems more appropriate in the case of home drainage problems to inform the home buyers that these assets are toxic alright, and in more ways than just being a bad bet for the lenders. The fund to whom they hope to sell the loan eventually does not want the paper at all with any problem what so ever. Sub-prime real estate lending is over.

The term “toxic asset” should be descriptive of the property condition as well in many cases. Beware out there home buyers. Get hip to the game and win.

]]> http://aaahomedrainage.com/archives/376/feed 0 http://aaahomedrainage.com/archives/299 http://aaahomedrainage.com/archives/299#comments Mon, 26 May 2008 04:00:57 +0000 DL http://aaahomedrainage.com/archives/299 Well folks, it is time to discuss something other than home drainage for a moment. Man cannot live on home drainage alone, a wise scholar once said. I forget who that was at the moment however.

We have heard so much about how the Federal Reserve is the friend of the economy, the citizens, and the banks, right? Well, guess what is happening.

The banks have been able to get money cheaper from the federal reserve at around 2%, as of late, under the auspicious of helping to solve the mortgage problem caused by sub-prime lending. The banks are supposed to be helping with a home market steeped in lingering deflated home prices. The banks would like to tell us that they are proactive in conjunction with the federal reserve to help reduce the staggering home inventory. Interest rates on 30 year fixed rate mortgages are still around 6% however, while the banks have broadened their profit margin, increased their fees, and are fattening up.

The U.S. public is being conned into thinking that the banks are getting cheap money to help U.S. citizens, and home sellers in particular, reduce the large existing home inventory, which is the largest inventory of unsold homes in 23 years according to Bloomberg financial news.

While home drainage problems are causing some Portland, Oregon homeowners problems while marketing their homes, we are not one of the worse off home markets in the nation.

It is obvious to me that the banks, the federal government, and federal reserve are the only ones benefiting from the whole game, as always. The manufacturing sector, who markets abroad, is slamming stuffed with cash right now, as everything exported to the rest of the world is dirt cheap in American dollars, as the dollar falls against foreign money. In other words it takes less of their money to buy our products because of the exchange rate difference.

These manufactures, and top level world market companies are the same people who the Bush administration gave huge tax breaks to as well, in preparation for this reaping. The value of everything coming into the U.S. is skyrocketing as the dollar falls in value against world currencys everywhere.

When the banks and mega brokers mess up, the fed bails them out. When consumers are lead down the garden path with new loan scams, causing the real estate bubble that must eventually occur, the consumer is the bad guy, and is hung out to dry. All that time, the banks were collecting big fees on sub-prime mortgages.

The supposed reckless homeowner gets stuck holding the bag as always, as the banking cartel, lead by the federal reserve, rolls a new scam in place, and protects their boys at the top.

There is always money to bail out a major player like Bear Stearns, but to hell with the little guy consumer citizen. When will the U.S. wake up to the hype of the federal reserve mandate? What a joke. Money for nothing, printed out of thin air.

The world is starting to get even with the U.S. though. This endless printing of money is largely at fault, as oil is indexed in dollars. The Japanese, India, and Chinese consumers are not paying what we are paying for gas because of the exchange rate. Gas is still relatively cheap to India, China, Japan, and other countries. Commodities are indexed in dollars as well.

The dollar falls in value as the federal reserve keeps printing more funny money. It used to be that the federal reserve issued a report called the M-3 report. It told the rest of the world how much money the federal reserve was actually printing into circulation. The rest of the world then had some clue as how to deal with it, with respect to valuation standards against the dollar.

Since the Bush administration has taken control of everything, the M-3 is history. The rest of the world no longer needs to know anything about the subject is apparently the mantra being spun. This approach to establishing a new world order, has opened a real pandoras box.

So, the United States is getting it every which way now, as the federal reserve plays it’s game with the stock market, and the options market as well. Massive funds invest billions, and swing the markets hard from side to side, destroying the small investor and the average consumers ability to even function within the markets anymore.

As world investors feel that nothing can be known with respect to the valuation of the dollar, the world quits buying U.S. bonds and dollars. The big investor play becomes food, foreign currency, gold, and gold futures, commodities, and commodities futures, oil, and oil futures, and in short, only the ones that have mega money to get in the game win.

Even the stupid notion that we can turn corn land into producing low mile per gallon ethanol is blowing up the prices of all grains and farm products, creating world wide hunger in parts of the third world.

Criminal and stupid. Ethanol is worse than oil, and costs more than it gives in the creation of a clean environment. These are documented facts.

As everyone starts buying oil, food, and gold futures, the price of these items rise, and just keeps rising. As prices keep rising, more money is flushed into the products and companies that produce them as well, and greed sets into the futures market, which further makes the price of everything go up more. Get the picture?

The prices are being artificially inflated by all those things at the same time.

The eventual goal seems to drive the dollar in the toilet, and force the United States into joining in a one world currency. Watch your back America.

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