President's Message

Tough Times

For a while, about two to three months ago, it looked like we were turning the corner on this tough real estate market. Now it appears that we haven’t hit bottom yet. Most people think this winter the ship will finally sink below the surface, and those of us still here can start swimming our way to safety. If you are one of the many people losing or going to lose a property, you can’t just bury your head in the sand and say, “Call me when it’s all over.” If you find yourself in this position, chances are you’re depressed, angry, constantly in a bad mood or maybe all of the above. Try to pull yourself together and start doing some research on your next move. Put a call in to your attorney and your CPA and talk about your options before it’s too late.

Here are some of your options: Do I just let it go to foreclosure? Do I short sell it, meaning try to sell my property for less than is owed against it (with the bank’s approval)? Do I do a “deed in lieu of” with the bank? Do I try to negotiate or restructure my loan with the bank? Each one of these questions has numerous avenues of liability, tax, and possibly future personal financial consequences. The last thing you want is to bury your head in the sand and then wake up to a big bad surprise that could have been avoided if you had only done some research.

Another thing my wife and I have seen is people using their credit cards to make their house payments, thinking that the market will turn and they will sell before they hit their limit on the credit card. This is a HUGE mistake, because after they have drained the card and then lose the house anyway, they could still owe thousands to the credit card companies. Those balances don’t get erased in a foreclosure.

If you’re in financial hard times there’s a saying called “protect your four walls” (I’m not talking about a house you own). Your four walls are food, shelter, clothing and transportation. Notice I didn’t say “and pay your credit cards.” Let the credit card people scream - you’re trying to survive! Financial counselors who deal with consumers in trouble say it’s pretty common that people will be up to date on their credit cards but are losing their house and their car or being evicted for non payment of their rent. They advise that you stop paying the credit cards because you can deal with them later. Stick to the basics. People are worried that if they stop paying the credit cards, it will ruin their credit rating, but so will losing your house or your car. You can repair your credit later.

Right here in Central Oregon there have been actual suicides over the loss of money. We all have to remember that it’s only money. You can always go get more, but you have to be here to do that. I wish everyone the best! And remember - we will get through this and be smarter and stronger for it.

See you next month!
Terry Luelling