Cash For Clunkers: How Foreclosed Homes In York PA Should Qualify?

This cash for clunkers campaign is just every where I turn and the other day after I heard about it for the first time I thought to myself...why on earth doesn't the government do something like this for York PA homeowners currently in foreclosure. I mean think about, we need something like that for the housing industry more than the car industry don't you think?

How exactly an industry like the American automobile industry (an industry that's been failing for years...not because of the recession but pure lack of will to compete with the Japanese and Europeans) figured out ways to tap into government bailout money blows my mind and annoys me. But that's a different story.

Anyway, back to the housing industry. I must say, the government is trying to help the individual and some of their efforts are working, for example the $8,000 tax credit for buying a home before the end of 2009. This program seems to have made an impact in York home purchases but what about the people losing their homes. What about them?

The Mortgage Debt Relief Act of 2007 was definitely a start. With this law passing, taxpayers weren't required to pay taxes on any debt that was forgiven related to a foreclosed home. Prior to this law, let's say you owed $100,000 and the bank was willing to accept $80,000 as the pay off for your mortgage - also known as a short sale. Well, that $20,000 difference was considered taxable income. Not anymore however. Definitely a step in the right direction.

But, banks need to do more and they need to be pressured by the government to do so too. And that's what I really want to talk about today. Here's why.

I'm currently negotiating a short sale for a Bank of America Pre-Foreclosure. The home has been condemned by the city of York PA as inhabitable. Out of all the properties I've invested in, this one has to be the worst. Honestly, I didn't have the ability to hold my breath long enough to even go upstairs so I just stayed downstairs when I and the appraiser inspected the property.

But I still made an offer on this property because the truth is, after spending maybe $20,000 on rehabbing this home, it'll be worth $40,000 - $45,000. Want to know how much I offered?

$5,000. Gotta say, that's the lowest offer I've ever made on a property.

So, today after about 3 months of going back and forth with the bank, they finally call me and tell me that my offer is too low and I should offer them $14,000. Which still is a pretty good price mind you but there's no way in hell I'm paying $14,000 for a property that's been condemned by the city of York as inhabitable and Bank of America knows that.

You see, it didn't take me long to justify to them why my offer of $5,000 was a good one. Our conversation ended with my bank contact asking me, "Ok Mikk, can you please get me some documentation from the city stating this property is condemned so I can get this taken care of"?

They'll have it tomorrow but more than anything...this is a property that should and definitely would qualify for a "Cash For Clunker Real Estate Program" if the government ever started one. Because believe it or not, I'm hoping my offer will be accepted but it might not. However, if there was some government pressure or some program like the cash for clunkers program designed specifically for this situation, the odds of it being accepted would be a whole lot higher. Maybe it's time!