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America Is House-Rich but Cash-Poor; These Businesses See Opportunity

By Feux Follets following x   2018 Jun 9, 1:41am 306 views   8 comments   watch   sfw   quote     share    


Lindsay tried to refinance his existing mortgage, but his bank was unwilling: he’d already done a loan modification once, after losing his job. And his debt-to-income ratio put a new mortgage out of reach.

The very same day Lindsay learned he wouldn’t qualify for a refinance, help arrived. It was a direct mail solicitation, in the form of a fake check “payable to Michael Lindsay for $186,000.”

A company called Unison was offering money in exchange for an ownership stake in the Lindsay house. Lindsay investigated, and found Unison’s process both “professional” and “informative,” he said.

“It had come down to the fact that the only other option I had was to sell the house,” Lindsay told MarketWatch. He hated that idea, since his two boys, who’d already been through so much, were thriving in their school district. And while he didn’t want to rule out downsizing, there was just too much emotion attached to the home where the boys had been born, where he and Vanessa had tracked their growth through pencil marks in the garage.

Ultimately, Lindsay said, “It just felt crazy that there was so much equity in the home and I couldn’t get at it.”

He signed on with Unison. After just three weeks, the company had dispersed $200,000 in cash to pay off Lindsay’s creditors and allow him to do much-needed deferred maintenance on the house.

Unison’s product, which it calls HomeOwner, has been around for years, but it’s really hit its stride in the past year or so. The housing market has not only recovered from the Great Recession, it’s heated up. According to an analysis from Attom Data, nearly 14 million Americans are now “equity rich” - meaning they have at least 50% equity in their homes.

It bears repeating that many owners and communities are not so lucky: over a million Americans are underwater, and some cities and towns are still reeling under the weight of abandoned and vacant homes and stagnant micro-economies.

But for most of the country, rapidly rising home prices and a dearth of anything else to buy means people are staying in their homes longer, allowing them to accrue more and more equity: $15 trillion worth, to be exact.

That may sound like a first-world problem, but as Lindsay’s example illustrates, all the equity in the world is worthless if it’s locked in an untouchable asset while medical bills, home improvement costs, and other expenses are mounting. And since home equity is usually most concentrated among those who’ve lived in their homes the longest, that’s often retirees - the people most in need of certain cash flow.

Companies like Unison see a business opportunity.

More: https://www.realtor.com/news/trends/america-house-rich-cash-poor-businesses-see-opportunity/

#Housing #HereWeGoAgain

1   jazz_music   ignore (2)   2018 Jun 10, 8:14pm   ↑ like (0)   ↓ dislike (0)   quote        

Hmmm, this product might actually be a legitimate win-win for both parties and a better alternative to a reverse mortgage or 2nd mortgage.

Such an alternative could put the necessary pressure on banks to offer more advantageous terms.

Interesting the test case was in Orange County where the house evidently went up from 600k to $1.2 million in 4 years LOL.
2   Strategist   ignore (1)   2018 Jun 10, 9:28pm   ↑ like (0)   ↓ dislike (0)   quote        

jazz_music says
Hmmm, this product might actually be a legitimate win-win for both parties and a better alternative to a reverse mortgage or 2nd mortgage.

Such an alternative could put the necessary pressure on banks to offer more advantageous terms.


It's a worse alternative than any kind of mortgage. A ripoff. You really think any finance company would do that without astronomical returns?
3   Strategist   ignore (1)   2018 Jun 10, 9:32pm   ↑ like (0)   ↓ dislike (0)   quote        

It's amazing how some people who cannot tell the difference between a good loan and a bad loan, think they know how to run the economics of a country. ROFL.
Reminds me of that dumb bus driver in Venezuela. ROFL.
4   bob2356   ignore (1)   2018 Jun 11, 1:19am   ↑ like (0)   ↓ dislike (0)   quote        

jazz_music says
Hmmm, this product might actually be a legitimate win-win for both parties and a better alternative to a reverse mortgage or 2nd mortgage.

Such an alternative could put the necessary pressure on banks to offer more advantageous terms.

Interesting the test case was in Orange County where the house evidently went up from 600k to $1.2 million in 4 years LOL.


Refinancing 200k to pay off credit cards? A legitimate win for both parties? Seriously? Do they share the loss if the house goes under water? I don't think so. The banks won't feel any pressure of any kind to offer more advantageous terms to people like this.

There is no such thing as house appreciation equity unless you move to someplace that didn't appreciate or seriously downsize of rent. You have to live some where. If you stay in the same area and sell house A that doubled in value then you have to buy house B that doubled in value.
5   APOCALYPSEFUCKisShostikovitch   ignore (30)   2018 Jun 11, 3:42am   ↑ like (0)   ↓ dislike (0)   quote        

I know pornography when I see it.
6   MisterLefty   ignore (0)   2018 Jun 11, 3:54am   ↑ like (0)   ↓ dislike (0)   quote        

Can't wait to buy securitized ownership shares. How much do they pay for a kidney?
7   Hassan_Rouhani   ignore (2)   2018 Jun 11, 7:25am   ↑ like (1)   ↓ dislike (0)   quote        

bob2356 says
Refinancing 200k to pay off credit cards? A legitimate win for both parties? Seriously? Do they share the loss if the house goes under water? I don't think so.


They say that they will share the loss after three years. To what extent - IDK (too lazy to read the fine print). Their share of the profit is bigger than the percentage of the equity they loan though (smthg like 40% of the profit in exchange for 10% loan), IIRC, so I suspect their share of the loss is similarly skewed in their favor.

PS. They charge an upfront fee for the pleasure. Their latest junk mail I've got last week says it's currently at 4%.
8   everything   ignore (1)   2018 Jun 11, 12:54pm   ↑ like (0)   ↓ dislike (0)   quote        

Here is just one review, not sure how biased. https://ptmoney.com/unison-review/
In an up market, Unison will fly and make money, it's all about the dollars.
Would I?, no way If I had 500k equity I'd be cashing out and investing that money for retirement and moving into the tiniest place I could find, not risking having to share that equity with some corporate conglomerate.




The Housing Trap
You're being set up to spend your life paying off a debt you don't need to take on, for a house that costs far more than it should. The conspirators are all around you, smiling to lure you in, carefully choosing their words and watching your reactions as they push your buttons, anxiously waiting for the moment when you sign the papers that will trap you and guarantee their payoff. Don't be just another victim of the housing market. Use this book to defend your freedom and defeat their schemes. You can win the game, but first you have to learn how to play it.
115 pages, $12.50

Kindle version available


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