Look for the Hook Behind the Bait!
On an idyllic afternoon a young rainbow brook trout glides effortlessly through the crystal clear river in Gatlinburg when in the periphery of its vision the fish spots something on the surface of the water. The spot dances, hypnotically, moving somewhat independently of the water's flow and the trout's instincts take over. With amazing speed and barely making a ripple the fish darts toward the target, deftly takes it down in his mouth, and heads back toward the safer depths below.

Before he can even get what he thought surely was a tasty fly swallowed it becomes clear that something is terribly wrong as he feels the hook set in his jaw. The line (which he NEVER saw until now) goes taut and he is pulled by something he still can't see back toward the surface. Even in the small brain of this beautiful fish the alarms are now screaming as a fight to the death has begun. As the now thoroughly hooked fish struggles to get off the hook the barbs dig in deeper and the pain shoots through his body. Regardless of which way he flails and jerks the hook just won't come out. At first he has some success staying down in the water but as he quickly tires it isn't possible to fight the powerful force that is inexorably pulling him towards the surface and his ultimate destination - a frying pan over a fire in one of the Great Smoky Mountains National Park campgrounds.

No, this post isn't a call to make fishing illegal nor is it really about fishing at all. I personally prefer my trout grilled although catfish I enjoy fried. The above introduction is to make the point about how the attractive bait hides the hook, the line, and the peril that awaits. In much the same way, borrowers are persuaded to take loans that appear attractive (the bait) but are actually deadly, at least financially so. Unscrupulous mortgage lenders over the past several years spent a lot of time tying several sorts of "flies" to use as bait to attract these unfortunate borrowers including:
  • Adjustable rates
  • No documentation required
  • Interest only
  • Reverse amortization

and on, and on, and on.

Because we specialize in foreclosure marketing about once a week I meet someone who must sell their Gatlinburg area real estate quickly. They have gone for the bait, the hook is set, and they are being dragged inexorably toward the surface where they won't survive (financially) for long. In fact, they have already caught a glimpse of their future destination and it isn't very pretty. Every over-extended borrower can look forward to their own "frying pan" which can include embarrassment, divorce, job loss, and depression or even worse.

If you've stuck with me this long please take heart. While very few fish ever get off a well set hook the key is not to take the bait to begin with. I have been working with two young couples recently who recognize that they can own a home for less than what they can rent it for. Further, they are committed to sensible loans at fixed interest rates the likes of which we haven't seen in MANY years. They have a good understanding of what they are doing and although both couples are comprised of two wage earners their budget is such that they will be able to pay the modest mortgage and their other bills even with only one income should the need arise. This sensible behavior is somewhat like that of an older, wiser fish that recognizes the expertly tied fly for just what it is - bait - and avoids even the slightest contact with it, preferring to find edible (and so much safer) food elsewhere.

This is a tremendous opportunity to purchase real estate at prices and loan terms that we haven't seen in decades. If you are paying to rent your residence and would like to discuss owning your own home, please contact me. We specialize in working with first time buyers and can help you avoid the bait and those nasty hidden hooks. If you've long considered owning a vacation home in the Smokies this may be the best time this decade to make your dream a reality. To live in or just to visit occasionally, you can't beat a beautiful Gatlinburg/Pigeon Forge/Sevierville home!

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