span specialists” throwing their
class="cap">F oreclo bandit signs up on every street
sure is the new “F” word, corner and filling your
arelessly tossed about as freely newspapers with ads and your
as recent job loss numbers. mailbox with touching stories
Foreclosure is ugly for the wanting to help you.
family with children losing their
Absolutely avoid theses wolves
home. It’s ugly for the mortgage in sheep’s clothing.
lenders not equipped to confront
Today was a really bad day. I
this uncontrollable epidemic. failed to help a single mom with
It’s damn ugly for the Realtors three kids avoid foreclosure. It
trying to help sellers in was a painful experience for me.
distress and buyers searching for And of course it was painful for
a bargain.Ready or not, here we them.
are and here we go.
As life often does, life
Welcome to Real Estate 2008! For threwTess M. of Orlando, Florida,
families in jeopardy of losing a fully-loaded can of whoop-ass
their homes, the only real beginning with medical bills, job
alternative from foreclosure is loss & divorce.
to negotiate a short sale NOW…not
Which wound can you guess was
later.
the deepest? Tess and her husband
If you’re behind in payments could not ride out this financial
and your mortgage lender (cannot) storm…they separated and
help you modify or work out your divorced, futher defining this
loan, immediately call a Realtors American (family) Tragedy.
who *specializes* in short sales.
Never did Tess believe she’d
Do it now. Do not wait for a lose her children’s father and
better day, and do not call the her children’s home. Throughout,
greedy, unlicensed bastards Tess attempted to protect her
masquerading as “foreclosure kids from this darkness, trying
to maintain life as usual. $258,750 (I could justify it as
But the kids knew….as is the well). Auction date was set for
case, the kids always know when January 18, 2008...much quicker
bad times hit home. They know. than I had thought. We had gotten
Tess knew that they knew, and over 50 showings. Not
that made all this malaise even surprising...great area &
more tragic.
"bargain" priced or so the
Short Sale Succeeds But bargain hunters thought.
Fails
To justify my list price, I
Let me stop for a moment. I spent hours compiling a market
want you to know upfront that I analysis for Nationstar Mortgage,
failed Tess and her children. I the mega mortgage lender ouf of
did not successfully negotiate a Texas. However, reaching a
short sale. I failed to help Tess decision maker in Loss Mitigation
at least walk away with a decent proved extremely challenging.
credit rating.
...until I figured out the
I friggin’ failed to help email nomenclature they use, e.g.
them!
John_Doe@mylender.k12.fl.us. I
You see, Tess’ last payment then researched the executive
was June '07. I came on board to branch and began emailing them,
short sell in November '07. She telling them I had a full price
(and her soon-to-be ex-husband) offer on one of their
owed $348,000 and the foreclosure pre-foreclosure (now an REO or
cost the lender around ~$50,000 real estate owned or bank-owned)
(9 months of no payments, holding properties.
costs, attorney/court fees,
I kept emailing.
utilities, taxes, insurance,
The price was right for the
clean-up fees, etc) ......... house, the neighborhood & the
$400,000.
local market. Finally, a VP of
I set the list price at Loss Mitigation emailed me,
apologizing and letting me know under-staffed. How could they not
he personally was reviewing the be under-staffed. Who anticipated
offer and would get back with me. this 100-year economic
From around or above the mountain meltdown?
of files, he found his computer
Appraiser Destroys Single
to email me.
Mom’s Hope
I was impressed. I had to have
During the review process,
been one of thousands calling and progress ground to a halt.
emailing, as more and more "bad" Suddenly, my first report
properties rolled in to requires a second report
Nationstar.
regarding the house, the
Suddenly, a flurry of neighborhood & the local market.
activity...lots of different The initial appraisal was grossly
people from Nationstar swooned overvalued. I fought that
down on me with questions. I appraiser's poor judgment with
struggled to keep their names or well-researched and accurate.
titles straight, but they all
Was this mortgage lender,
were extremely helpful and Nationstar, in denial about poor
wanting to get this done.
market conditions? I don’t
Note: As Realtors, we get know.
insanelyvupset when it takes
What I do know is that in my
weeks and months to hear back second report to Nationstar, I
from the Lender re: an offer on a simply wanted to write, "Take my
pre- or foreclosed house. Our first report and think
buyers get upset. Our sellers WORSE...now you have the state of
trying to save some shred of the house, the neighborhood & the
credit get upset. Everybody gets local market from my first
upset. However, from the mortgage report."
lender's position, they are
Two months go by and
flat-out overwhelmed and clearly Nationstar continues to sit on a
full-price offer from a strong really happening…and it’s
buyer who’s putting down 60% happening more often with each
cash. day.
BPO Rescues Sale For Buyer
I previewed a home last week
The house, now bank-owned, for a lender and could not
gets a second appraisal, this believe what I
time from a broker who performs witnessed.....smashed
what is called a BPO (broker windows....gutted kitchen (not
price opinion) in late January one cabinet...not one
’08.
appliance...not one
I kept emailing, always countertop...not one light
inserting factual information, fixture...nothing!)...gutted
never wanting to waste their bathrooms...thousands of holes in
time.
the drywall...holes in all
In the meantime, Tess and the ceilings...no carpet...busted
children remain in the tile!
house...two full months after the
Worse, the stench was
auction. In fact, they just moved unbearable...even from outside
out last week to allow the house...the worst "sewer"
inspections to take place.
odor you can imagine. Was it
As a courtesy for leaving the because all bathroom fixtures
house in "broom-clean" condition, were gone? Was it the feces
Nationstar wisely provided the spread throughout the
(previous) owner $500.00. What a house....onto the walls as
SMART business decision!
well?
The Fear Beyond Fear
I could not leave fast enough,
You see, a lender's fear today and certainly photos did not do
(and rightfully so) is that a this "crime" scene justice.
house in foreclosure will be
Oh, by the way, this is a
destroyed and stripped. Yes, it's house in a $700,000
neighborhood...a so-called enough loss mitigation staff. Out
"exclusive" neighborhood. Was of necessity, mortgage lenders
this vandalism? Or was this an are telling homeowners in
angry owner who lost a house? pre-foreclosures to list for 90
That's not my investigation or days (or longer) before even
problem. However, here's a fact. considering a short sale. Forget
Similar situations are "deed-in-lieu-of-foreclosure" --
happening...other Realtors report most lenders are not accepting
similar horror stories and not properties "deed-in-lieu...."
just in Florida.
What's the solution? Well,
Alleged angry home(owners) are here's one, and I'm certain this
destroying and stripping their proposal will stir the pot and
homes before surrendering them, get dismissed automatically as
often forced by the Sheriff to unfair, flippant and even
leave. Vandals and vagrants are impossible. Impossible?
destroying and squatting.
Impossible is what we're
And mortgage lenders must witnessing on Main Street and
decide to fix the damage or sell Wall Street. Flippant is
"AS-Damaged" (not even the believing this market with right
typical AS-IS).
itself. That's flippant and
What happens to a neighborhood irresponsible.
shellacked by a couple
Here's my common-sense
foreclosures, sending values approach, clearly lacking any
plummeting by 25-50%? Trailer formal finance or economics
homes to palatial estate homes, education:
this epidemic is paralyzing
Adjust mortgage payments and
Florida (perhaps the mortgage amounts to today's
country?).
prices. Do it NOW! Instead of
The Worst Is Yet To Come.
continued writedowns and economic
Mortgage lenders cannot hire meltdown, keep people in their
homes. Give them a certificate border-color: #FFFFFF;
for the difference between their background-color: #F5F7FB;
mortgage amount and today's value border-left: #BAC9FF 1px solid;
(ex: they owe $348,000; today's border-right: #BAC9FF 1px solid;
value $268,000; certificate margin-top: 5px; margin-bottom:
$80,000). 10px;" valign="top"
Insist they cannot sell for align="center">
one year unless absolutely
necessary. Hence, they receive a credit (certificate) of $80,000. type="text/javascript">
"3E3F43";
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Article Tags: foreclosure, house, mortgage
