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Foreclosures Fueling Public Outrage. Be careful…

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REOs in the pipelineAre you one of the good guys or bad guys? (If you deal with foreclosures, REOs, or defaulted borrowers, be careful…)

Actually, that’s  a trick question. But read on to find out how you, as someone involved with distressed asset transactions as a real  estate professional, may BE SEEN as one of the bad guys as public outrage over foreclosures grows.

Reason vs. Emotion

Paul Jackson, the publisher of HousingWire magazine, provides the pithiest summary of “rational” left-brain analysis of how to fix the housing disaster in his article, “Housing Recovery is spelled R-E-O.”

In the article, Jackson makes the case that there are way too many seriously delinquent loans out there for short sales and loan mods to make a real dent. The only solution, he says, is to foreclose, take back the properties, and presumably let these properties get re-absorbed by the private investment market. Jackson states that:

“We aren’t going to simply short sale our way out of 7m or so housing units’ worth of foreclosure overhang. What gets us out of this mess is tens of thousands of committed real estate professionals that really understand REO.”

Granted, HousingWire’s parent company, the LTV Group, also puts on the REO Expo conference, which has a vested interest in increasing the size of this army of REO-centric “committed real estate agents,” but he still makes a strong argument that short sales, loan mods, and (most often) inaction and delay are just prolonging the pain of the housing mess. Jackson wants us to take our bitter medicine like a frat boy shotgunning a beer on gameday.

But the thing that Paul Jackson doesn’t acknowledge is the very real anger and outrage shared by many Americans over the bloody consequences of foreclosure in their own backyards. You’ve heard the horror stories about people losing their homes; there’s no need to trot out examples here.

So are the millions of foreclosures that have happened in the last few years a tragedy or a necessary correction in the credit and housing market? You can decide that one for yourself (I think it’s both), but here’s where we as real estate professionals need to be very, very careful.

First, let’s admit that there’s a lot of money to be made from dealing with foreclosures, REO, and lots of “today’s” business is dealing with defaulted owners.

And yes, this is probably a necessary path to go down as we correct for all those mortgages that shouldn’t have been written.

But…

We need to be careful so that, as real estate professionals, we don’t get seen, in the end, as one of the bad guys.

Don’t forget the intense, lingering anger out there for the banks behind most of the active foreclosures and REOs. The backlash against the “bank bailout” is based on the emotional argument that it’s fundamentally WRONG for the banks to have accepted taxpayer money and then turned right around and started throwing people out of their homes.

Timothy Geithner will tell you that’s not an accurate analysis, but that’s how many people see it.

And the implication is that banks are cold-hearted, uncaring, and maybe even EVIL.

So what about you?

As a real estate agent dealing with short sales or as a  foreclosure auction buyer, as an REO investor, as a short sale specialist, as a mortgage lender or defaulted note buyer–are you ONE OF THEM (i.e. predatory and possibly “evil”)?

Pay attention to the reaction to stories like the recent one in the Sun-Sentinel about the guy who got foreclosed by Bank of America even though he DIDN”T HAVE a MORTGAGE (!)

As you can see from reader comments, this story struck a nerve of frustration and anger toward the banks but ALSO toward the other parties involved, such as, in this case, the law firm who handled the foreclosure filings (refered to in a comment as a “fraud factory.”)

This outrage hit new peaks with the recent revelations of “robo-signers” who sign tens of thousands of foreclosure filings monthly. Everyone understands that the banks and servicers are just churning these things out without any consideration to the actual facts of individual cases.

Listen, I’m not suggesting that the defaulting borrowers are simply the victims of greedy banks and investors, but the public loves a good scapegoat, and the banks are doing a great job of painting a big red target on their backsides with these sloppy practices.

So be careful.

As you enter the lucrative and active market around distressed properties, make sure that you tell a different story–one of how you and people like you are helping re-stabilize neighborhoods, helping put things back on solid ground, and helping people get into better, more stable situations for themselves.

You don’t want to be seen in your community as another “vulture” feasting on the carcasses of your neighbors.

Have you been the target of any of this spill-over anger? How do you talk about what you’re doing when you deal with with these distressed assets and the people and banks involved with them? Let us hear your thoughts below…

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  • francesco

    I agree.

  • Stephen

    I enjoyed reading the article.

  • http://www.buckscountymoves.com Keith Reilly

    Excellent article. We really do need to be careful about how we as real estate professionals portray ourselves. People need to understand that its a win-win situation.

  • http://www.countryroseinvestments.com Eric Howard

    this is interesting

  • Chris

    Banks have always been seen as evil, just study a little history. This article is very self-serving, however something to be expected.

    As for the foreclosure situation, people need to have jobs to hold onto their homes, does not matter how the original contract was written, they all want to be paid.

    We are starting to see more of the Shadow inventory coming into the market finally. This is bouncing the numbers back up, the real excess housing rate has not moved that much, we are just seeing more of what has been held back from the market by the banks. Expect the retail values to go down further, several areas are around the country.

    As for real estate professionals, they have as much or more in responsibilty for what is happening and has happened as anyone else, including the lenders. They knew things were out of control, actively partcipated in fraud and now are whining they are the only good guys. Get rid of so called real estate professionals, along with Fannie and Freddie and we will see so reality move back into the market at a much faster rate. For those that take offense at the real estate professional being tarred, I turned in several for fraud and other violations during the boom years, not one was so much as talked to about what they were doing, it was swept under the rug by the powers. Interesting they are all out of business now! The industry does nothing to protect the average people whom do not understand they are being screwed by a realtor or do not understand the realty laws they need to abide by.

    So the private investors are generally good, the professionals in the last several years are a giant question mark as far as I am concerned.

  • http://www.seepahrumpwithandy.com Andrew Alberti

    Banks are investing other peoples money and have an obligation to them for either a return on the invested funds or at least not to lose it. The entire mechanism is not visible to the public. When a bank forecloses and actually makes money on that deal something is wrong. They just took a homeowner who once qualified to buy but today cannot make the payments out of the system for a few more years. Banks think they can predict future performance from past activity. The reality is that many have a bump in the road only to recover two or three years later. There are many examples of wealthy individuals and mid in America who can be cited. A different system of handling defaults before they get to foreclosure is needed so those hurt in a recession/depression can get back in the game sooner as things improve.

    It is better to have a homeowner stay in the home, care for it and work our arrangements for payments as markets improve. The only ones getting any benefit from foreclosure is Big Bucks with cash. They would still be there but as I’ve said, we need to make an adjustment to the system.

  • http://www.shoppahomes.com Diane LePera REALTOR

    Well as an experenced REO Agent, I find a different outcome. I usually end up with a Hug, some tears, and kindness by the time I give cash for keys. It really is All about How You Treat The People in distress. Treat them respect and kindness, be patient for them to accept the reality and you will find most people become very cooperative.
    Now I must say on the other hand, the short sale agent who lost the listing to forclosure is much more likely to hate you and be your enemy. They hung onto a listing they could not close and are angry as they did not get a commission. They generally lead the homeowner in the wrong direction and ends up everyone loses.
    That is why I could not agree more, skip the shorts, do the REO’s and maybe the banks should just accept deed in lue of of Forclosure. Many times this is the best option for both parties. The home gets maintained, the homeowner is set free and the REO agent gets a listing that can sell. Ah the perfect world.

  • Robert McGuire

    My neighbor mumbled “How sad.” upon learning that our REO business was doing well.
    I said, “Out of 150 or so deals we’ve done, I can count on one hand “real” hardships. We are getting out people who won’t pay their mortgages and putting in people who can and will.”
    He nodded, “OK. That makes sense.”

  • Tim

    This is a great article and a very important one in light of the revelations by GMAC, and soon Chase. There are implications for Real Estate Professionals who are party to fraudulent transfers. Knowingly or unknowingly – could have and should have known. Banks ARE commiting fraud and not being held accountable, don’t become a victim by helping to perpetrate it.

  • RICHARD ZWICK

    As a Realtor and investor I agree. We should stop doing short sales and tell homeowners to just give it back to the bank as many homeowners will be chased down for the deficiency and ruin their credit anyway. It would mean everyone would have more time less aggravation and again do our real work. Wells Fargo has told us they wiull stop doing short sales and judging by their restrictions now that will be shortly. It is also getting harder and harder for investors to flip short sales because of the many restrictins placed by the banks.

  • http://greatdayforrealestate.com Tom Fitzgerald

    Excellent article. We are starting to see some of our profession getting into trouble. This puts us in a defensive mode with our clients (homeowners, Realtor, lenders and private investors. We always have to do our due diligence if we want to maintain our reputations.

  • Wendy

    wow Diana – just a little self-serving aren’t you? foreclosure better than short sale? what planet are you from?
    it’s not hard to spot the REO brokers on this blog post. some of you are as disgusting as the banks – hey!!! those are REAL people in those homes – not just another commission!

  • Shawn

    Don’t pity the banks, they didn’t produce the money to fund these loans, they were paid huge origination fees, (breaking RESPA and TILA laws left and right), they were “paid in full” when they sold these loans to the secondary market, they got paid again for servicing and retained the late fees on loans they know would pay late and become deliquent, they have the taxpayers covering their losses and the Legal system allowing them to break or make up laws and foreclose anyway – they seperated the Note and the Deed of Trust or Mortgage in order to securitize the Notes at which time the Note holder should only have Judicial recourse not the right to Foreclosure. If they can’t produce the original note, with a wet signiture, what will keep the true holder of the note from pursuing the debtor too? MERS was a big coverup to allow the banks to play games that were outside of the view of the public and I am tired of paying for their corrupt money grab. When this is all said and done the banks will be richer and a huge portion of the American public will be perminent renters! Clinton allowed the Glass Siegal act to be repealed and here is what we get for it – the banks gambling and the American Taxpayers and Homeowners paying for it. Well Done!

  • http://www.SanDiegoHomes4u.com/Home.htm Dennis Smith, Carlsbad Realtor

    Is my solution too simple?

    Banks should refinance all homes where owners are making their payments, without having to qualify or get an appraisal. They would lend at what the money is worth today!

    This would accomplish two things.

    Banks would make loans at todays lower rates so fewer people would lose their homes (and the banks and investors loose more money).

    ALL owners would have more money at the end of the month. They would spend it just like they would if they got a tax reduction, thereby stimulating the economy.

    Almost everybody wins. If you like this solution, call or write your Representative and tell them.

  • Cathy

    Very interesting article.
    I am not entheusiastic about short sales, I don’t feel sorry for the banks as they did approve bad loans however; many of these foreclosures are due to loss of jobs or cuts in salaries. I focus on the win-win sometimes I have to be very creative and it is a great feeling when we are successful.
    Just an FYI, it is a good idea to get a copy of the title to your properties every several years. I live in Alameda County, CA – My husband and I, third owners, had been in our house 21 years, we had refinanced twice and were going for our third re-fi. When the bank checked the title; our neighbor had a $60K loan against our property and every entity that had ever been on the title was listed as current owners. The explanation was, the County had implemented a new computer system that failed so they went back and entered all the old information and it was a typo error on the APN that put the $60K loan for the neighbor on our property. We had to hire an attorney but we eventually got our re-fi and a clear title.

  • gainsmore

    Shawn in the above response has it closest to the actual events.But I’m speaking of events prior to even what he is saying. Banks do not make Loans.They convert the mortgage note into bank credit and the ‘money’ to buy the asset is then created on the spot. You may say why is that a big deal? How can the banks with no capital investment in the asset repossess the asset? How have they been damaged? Oh, they have lossed the payment stream from the fraudulent conversion of the ‘borrowers’ pledge to repay the money that they themselves(borrowers) created along with the Banks license to print monopoly play money. How does it make it right that just because the Bank has a government granted right to issue credit via the Fed and being a member of the that stink pot that they get an asset that people had to build with their own hands …and if they fail to pay due to the very system crashing that the banks are operating under and directly influencing ..well sounds like racketeering to me! How can they repossess someones home that was monetized by a system of fraudulent conversion of an commercial instrument? Think about this….. how does the mortgage come into being in the first place? By the borrower pledging to the ‘lender’ that they will repay right? So what loss is the bank on the hook for- especially when they’re getting bailed out by the same government that debases the currency to repay these fraudulent ‘loans’.

    I was a mortgage broker for five years and learned of the fraudulent nature of the entire banking system. So when those who rush in and try to legitimize the fraud and claim that they are saving families from foreclosure the whole thing becomes insane, crock of sh**t. Short sale, REO whatever. Don’t insult us who know there is NEVER a full disclosure of the TRUE terms of the mortgage. TILA is always violated daily… Never mind for now that people where drawn in and over their heads. Easy credit was the word at the FED since the tech crash in the beginning of 2000. How about the banks showing us the their skin in the game!! NONE! Please tell/show me where the money comes from that the Banks ‘lend’ to the ‘borrower’….. it comes from the borrowers signature that where….. and then that instrument(ie mortgage) is converted into bank credit and it has commercial value. They can’t loan out the deposits- so those who say that are ill informed. They inflate the money supply through ‘loans’. It’s all a shell game designed to extract property and energy out from under peoples noses and those without the smarts or balls to confront the system- much less the money. If people really got real and looked at whats really going on then they might have a clash of conscience. There is so much fraud that it blows the mind- everyone is committing usury in all chains of the transaction as far as I see it….and when this system goes away, for it will…duck

  • Dan

    I am sorry but when I see banks turn down loan mods, turn down short sales, take the house to foreclosure and run up the price at the court house just to take it back and sell it as an REO for 30% less than the amounts they turned down something is terribly wrong!!! Not only does the home owner lose but everyone else other than the REO realtors lose too. The neighborhood loses as their values go down, and probably fanniemae or freddiemac or the PMI company guaranteeing the loan loses too.
    Not to mention that as each one of these houses goes on the market not only do we have another property in inventory dragging down prices but we also have one less potential buyer because the person who loses that house will be ineligable to buy another one for several years. How long can banks keep turning down loan mods and take properties in forclosure before we hit a tipping point where the combination of excess inventory and the reduced number of eligable buyers reaches a point of no return?
    Are banks evil? Maybe,maybe not but what they are doing is either very short sided and just down right stupid or they do not care what they are doing to the country’s economy as long as they are getting theirs. Currency only works if their is a “Current” and when the banks stop that “current” because they are afraid it will not flow back to them they are creating a log jam and a self fullfilling prophecy. Not unlike when they look at appraisals and the current market conditions and conclude that the property is in a declining market and therefore will only lend x number of dollars less than the current appraisal. It may seem like good business sense but it actually perpetuates the declining market because the buyer does not have the extra x number of dollars to make up the difference and so the house sells for less continuing the downard slide. This not only confirms the banks concerns on that property but it also drags down property values of the houses surrounding it putting more people underwater on their houses. Which is a major factor for people who are choosing to do strategic defaults. Do I think strategic defualts are wrong? YES, but the banks are contributing to the circumstances which put people in the position to choose this behavior. I can not tell you whether it is Fear or Greed that is making the banks do the things they are doing but I can tell you that it is not the big picture and the good of the nations economy that they are considering.

  • incomediversity

    Intelligent comments above–every one. It’s like the blind men and the elephant parable. So I popped on over to read the article in the SunSentinel about the man who bought his home cash from the bank short sale department. I love the judge who ordered the subsequent foreclosure on the prior trust deed… “From the court’s point of view we have no way of knowing that someone sells a house unless they tell us.” Absolutely, let’s blame it on the “they.” Judge Tobin should be off the bench with that pass-the-buck bureaucrat “get the problem out of my face, I don’t want to problem solve” attitude. Hey, it’s Florida. All the court has to do is require the trustee’s attorneys bring in a deed history, pulled in seconds from PUBLIC RECORD to see whether people like Mr. Grodensky already purchased the property to save it from foreclosure? Foreclosing on homes that the bank already sold happens all the time because the foreclosing trust deed has priority. But come on, let’s look at the next page in the public record. Then, don’t ya think maybe the courts should stop the foreclosure until proper notice is given and evidence brought in to stop the right hand at the bank from foreclosing when the left hand at the bank already sold the house? Gee, I wonder why people are so angry with the whole damn system.

    I am a real estate agent of 24 years. I saw the condo conversion developers in San Diego gouge prices on newbie, young, bright-eyed hopefuls. They were able to price the units $100k over what the even the bubble market value would indicate (appreciation of condos exceeded homes) because of the predatory 100% loans made available. These kids were faced with interest rate and payment changes that caused their payments to increase $500 per month. Resale agents only saw this after it started to crash because so few pay attention to the new sale market. How could this happen? There WERE laws that used to put caps on margins, interest rate increases and payment increases in the adjustable product. (I made money on an adjustable rate loan from World Savings put in place in 1991, and brokers and lenders were so careful to warn people about the product then.) This is not the first time laws on the banking industry or lack of enforcement of them caused this kind of bubble. When banks were deregulated (think Reagan era and others) the Savings & Loan became “anything goes” investors…appraisers could not keep up with the $10,000 increases in new home prices every two weeks…and the S&L backers of these projects built a deck of cards that completely collapsed. We didn’t learn anything from history, not even a history that was just 15 years old.

  • incomediversity

    When I say I made money on an adjustable rate loan with World Savings, I mean I incurred negative amortization only 6 months out of 12 years, and had an equal or lower interest rate the other months. It was tied to the 11th district cost of funds. World Savings later created their own index to which to tie the adjustable interest rate–how corrupt can you get? Those loans became reverse mortgages. Maddoff was just one of many robbers. I think they all went to the same school that taught “as long as you don’t get caught, it is right.”

  • Pj

    No I think we are really helping these people…The ones to blame are mortgage companies and mortgage brokers!!

  • http://www.melonierich.com Melonie Rich

    I am a RE/MAX agent in Tennessee. I tried to negotiate a short sale on a property I had listed for over a year. This property had a 1st and 2nd mortgage, totalling $900,000, both with SunTrust. The house was bizarre, it showed more like a carpeted warehouse than a luxury home. Another agent brought me an offer for $700,000. SunTrust declined the offer and foreclosed on the home. It was listed with an REO agent, didn’t sell.

    Several months later they sold the house at auction for $450,000! They left $250,000 on the table! Who did this help?

  • David

    This unfortunate story of the wrong property being foreclosed is the exception, not the rule. Were it as “common” as the writer would lead one to believe the whole system would collapse. That is not the case. Agreed, lenders need to face the same reality that some homeowners must face: there needs to be a sale and it will be for less than the mortgage.

    The overwhelming majority of real estate professionals are not perpetrating fraud as the article writer suggested, but are doing their jobs as best they can in a climate dominated by lending created by bad, misguided legislation. The reality is that not everyone should own a house. If you can not manage your finances you need to rent until such time as you learn to manage your resources. Reality is reflected in this adage: buyers are liars, and sellers are too. We who work real estate MUST rely on the honesty and integrity of the client we are working with. There is little to no penalty usually to dishonest clients, however the real estate professional gets sued with no second thoughts about it.

    I have assisted too many people in getting their finances in order, while teaching them to budget and live within their means. Then they qualify to buy a home. Once bought many times they loose all sense of logic and reason. They proceed to take out more credit- to buy new furniture, new cars or trucks, take expensive vacations, buy a new 60” plasma TV or some other such “necessary” item that they could really have lived better without, while stretching their finances to the hilt. Then when there is a hiccup in life they lack the resources to work through it- and the first item for which they stop paying? You guessed it correct if you guessed their house. It seems to be of greater importance to “maintain the appearance” than to live in reality, they just over spent themselves into trouble and did not set aside rainy day reserves. Stupidity is inherited by the way; if parents do it, their kids tend to also do it. That is why you have 3-4 generations on welfare, attend college or what ever their family places importance on, it is passed on to the kids and their kids and their kids until somebody says “This is not working!” and stops the behavior. Then life changing change can occur.

    You can not legislate people’s spending habits (although some politicians are trying). Yet legislation required that lenders find a way to loan people money to buy homes that otherwise would not qualify. From that mandate the secondary lending market aka B-C lending came about followed by “zero down”, 100% financing with Seller paying closing and prepaid costs and no-doc lending, giving loans based upon what you told them without real verification. The buyer had nothing to loose because they paid nothing to buy. Interestingly when earlier this year when it was proposed that buyers be required to have a 5% down payment to qualify for a FHA or other government backed loan, Chris Dodd snapped back with “Then only those who can afford a home will buy them!”. DUH!!! It is his kind of thinking that got us here! And the legislation that was intended to “help” low income people- and many of minority status fell into that category- was severely misguided. When lenders can not make a judgment call because the risk is that person may not, or most likely will not repay the loan based upon their credit history and income, why on earth or in hell for that matter would anyone lend them $100,000.00 or more? Bad legislation found a way. I say let them reap what they sowed- politicians especially included!! Legislators, using bad legislation made slaves of the lower income people and the rest of us as well with their meddling in something they knew nothing of.

    The real problem is that the innocent people- the vast majority of us who pay our bills timely and manage our credit well are also paying a longer term cost. The cost of credit- including higher interest rates- will go up once the artificial downward pressure the US government is currently exerting is removed. Be assured, it will be removed. Qualifying for a loan or mortgage will become more difficult for those with steady work and reasonable credit risk. And the debt that the government unnecessarily incurred over the last 4 years and committed to over the next 20 years will come home to roost with a vengeance.

    Before you place blame, learn to be responsible; do your research to see where it really needs to be placed. While you are pointing a finger at someone else there are 3 pointing back at you on the same hand!

  • http://www.welcomehomevirginia.com Mary

    Last year I watched a tv program that actually helped me understand(somewhat) how we have gotten to this incredible state of affairs in our Real Estate Industry. It’s called “A HOUSE OF CARDS”…if you get a chance, please watch it. As in most things, once standards are lowered, quality suffers(fraud has always been there so don’t be too upset or surprised to discover that yes, some people lie, cheat, steal and take advantage of their fellow man..always have, always will).Even Alan Greenspan couldn’t make heads or tails out of the “new” loan processing..wasn’t he supposed to be one of the many watchdogs? TOP-DOG? Was he punished for failing to do his job? Don’t think so..The US had one of the soundest banking systems in the world until we stopped watching..so the phantom bad guys jumped on board and took advantage of it..we dropped our guard..are we all guilty? nope, we’re not..did we(as realtors, loan officers, closing agents)tell the “some-time”very willing to lie Buyer that his loan not only could change but would change so be prepared for it..?
    Did we ALL say,”don’t worry, I’ll just get you refinanced before that happens”? Not all of us, but too many. When my Clients would sometimes ask me if they were going to make a ton of money on their property, i just looked at them and said” If i knew the answer to that then you and I would not be having this conversation..I don’t have a crystal ball..if i did, i would be relaxing on a nice beach faraway from here” I’m getting a little tired of being blamed for doing my job then and doing my job now(short-sales,reo properties). The Banks have to finally take their licking, salvage what they can(stop taking money that has been so easily given to them and get America back in business..doubtful on the $$$ part,huh?)I do Short-Sales and I List REO properties and I Sell houses and I Rent them..because that’s my JOB..So, if we “can” hold the really bad guys accountable then go for it and when we have wasted enough time and money doing that then let’s get back to business and try and jumpstart our Economy the old fashioned way..Don’t Lie, Treat All Parties Fairly and give your Clients the information that they are in one way or another PAYING you for so that THEY can make their own decision..hopefully, a sound one.

  • Linda

    I agree more with Dan than anyone. This is a real story. Let’s say a person has saved a lifetime to own a condo on the Gulf and agrees to an interest only payment intending to refinance when interest rates fall. That person pays $250,000 of savings down and the banks jump at the chance to compete to get this business. So now, after paying on this condo for 5 3/4 years (and has paid $130,000 and the balance is still the same), the owner has had to resort to living with mother so he can rent out his condo only to have an oil spill ruin that idea. So he tries to negotiate with the mortgage company who now holds a $538,000 mortgage on property that has a market value of $362,000. They won’t reduce the mortgage to the current market value even with the owner explaining he is out of funds and all life savings are exhausted. He can hold on if they will refinance at the existing value. The mortgage company explains that they are private investors (they bought the mortgage from the bank) and will not accept a deed in lieu of foreclosure, and they will most likely not agree to a short sale. They can collect the lost value from the Government. In the meantime, the owner has lost $250,000 down and $130,000 in interest or a total of $380,000. The bank has made money and the investors have made money. Only the owner has lost money. Yet the investors will force this to foreclosure and then get a judgment against the owner for the difference in the $538,000 and the amount for which they sell the unit which will be less than the owner offered in the first place. The only loser in this business is the owner and as another person said, they won’t be able to buy another home anything like this for the rest of their life..he is 65 years old and living in a trailer with his mother who is 85. Banks, mortgage companies, and mortgage brokers most definitely are the villains here!! Someone care to tell this 65 year old man something different? P.S. This particular mtg co is Central Mtg Co.

  • Mercha

    I believe that banks should allow owners to buy their houses back (short sale back to owners) these are the people that have invested money, time and effort on these homes. Most people need a new mortgage one that makes more sense, well if they can buy the home again at todays values, pay their new downpmt and closing costs for God’s sake let them! It is better than a Modification! People will really find money to pay their down pmts, and they will be happy, they will continue to maintain their homes and expand, remodel, fix whatever they want which of course will put money back in circulation. Short saling the homes or REO the homes to strangers and having the original owner remain homeless and without credit is not fair. SOme poeple had 100% loans but not everybody, many people put 5%,10%, 15% and 20% down, some even more, but more importantly they paid tons of money in interest over the acquisition years, so they deserve to keep it.I believe this is a restriction that makes no sense and only provides for more fraudulant behavior.
    Are we all to blame, maybe, but we are all paying the consequences of today’s financial nightnamre.

  • http://www.WoodardAndRoss.com Lynne Ross

    I am NOT an REO Realtor and have no desire to be. I have been doing short sales when they were called Short Payoffs before the bust. The short sales are an effort put forth by the seller to help the banks from having so many foreclosures. I feel like they are making every effort to avoid losing their homes but are turning very angry when the banks do not share their same concerns. They sit on hold for hours to have some minimum wage representative that doesn’t have any Real Estate or Banking experience for that matter. I feel the banks have dropped the ball on their customer service and willingness to help find a solution… A REALISTIC solution. Wells Fargo has been the absolute best to work with. They realized what was going on and made changes to accomodate their clients. They have made the process much faster and have saved their company millions from being lost in foreclosures. Bank of America on the other hand has lost so much money by poor management. I had a listing for 2 years that was tied up in their system. TWO YEARS it sat empty because you had to wait for their process. I have seen sellers get discouraged and throw their hands up and say forget it. I think we should quit beating up sellers… they have been beat up enough. Short sales are the best solution. REO Realtors would disagree I am sure. The banks need to step up. Hats off to Wells Fargo. Bank of America is getting a TAD BIT BETTER.

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