What Every Real Estate Agent And Single Mom Facing Foreclosure Needs To Find Out About The “F” Word – This Is Life
Website design By BotEap.comWelcome to Real Estate 2008! For families in danger of losing their homes, the only real alternative to foreclosure is negotiating a short sale NOW…not later.
Website design By BotEap.comIf you’re behind on your payments and your mortgage lender (can’t) help you modify or settle your loan, call a real estate agent who *specializes* in short sales right away. Do it now. Don’t wait for a better day, and don’t call the unlicensed, greedy bastards posing as “foreclosure specialists” who toss their bandit posters on every corner and fill your newspapers with ads and your mailbox with heartwarming stories wanting to help you. .
Website design By BotEap.comCompletely avoid these wolves in sheep’s clothing.
Website design By BotEap.comToday was a really bad day. I couldn’t help a single mom with three kids avoid foreclosure. It was a painful experience for me. And of course it was painful for them.
Website design By BotEap.comAs is often the case in life, life threw Tess M. of Orlando, Florida a full can of screaming that began with medical bills, job loss, and divorce.
Website design By BotEap.comWhich wound can you guess was the deepest? Tess and her husband couldn’t weather this financial storm…they separated and divorced, further defining this American (family) tragedy.
Website design By BotEap.comTess never believed that she would lose the father of her children and her children’s home. At all times, she Tess tried to protect her children from this darkness, trying to keep life as usual.
Website design By BotEap.comBut the kids knew…as it happens, kids always know when bad times come home. They know. Tess knew that they knew, and that made all this upset even more tragic.
Website design By BotEap.comShort sale succeeds but fails
Website design By BotEap.comLet me stop for a moment. I want you to know up front that I failed Tess and her children. I did not successfully negotiate a short sale. I couldn’t help Tess to at least walk away with a decent credit rating.
Website design By BotEap.comI couldn’t help them!
Website design By BotEap.comYou see, Tess’s last payment was in June 2007. I joined the short sale in November 2007. She (and her future ex-husband) owed $348,000 and the foreclosure cost the lender about ~$50,000 (9 months without payments, retainer costs, attorney/court fees, utilities, taxes, insurance, cleaning fees, etc.) ……… $400,000.
Website design By BotEap.comI set the list price at $258,750 (might as well justify that). The auction date was set for January 18, 2008… much faster than I had thought. We had gotten more than 50 passes. No wonder…great area and “bargain” price or so the bargain hunters thought.
Website design By BotEap.comTo justify my list price, I spent hours compiling market analysis for Nationstar Mortgage, the Texas mega-mortgage lender. However, reaching a decision maker in Loss Mitigation proved extremely challenging.
Website design By BotEap.com…until I discovered the email nomenclature they use, eg [email protected]. I then researched the executive branch and started emailing them, telling them I had a full price offer on one of their pre-foreclosure properties (now an REO or real estate or bank owned).
Website design By BotEap.comI kept sending emails.
Website design By BotEap.comThe price was right for the house, the neighborhood, and the local market. Finally, a VP of Loss Mitigation emailed me, apologizing and letting me know that he was personally reviewing the offer and that he would get back to me. Around or above the mountain of files, he found his computer to send me an email.
Website design By BotEap.comI was impressed. I had to have been one of thousands of calls and emails, as more and more “bad” properties came to Nationstar.
Website design By BotEap.comSuddenly a flurry of activity…a lot of different people from Nationstar were swooning over me with questions. I struggled to keep their names or titles correct, but they were all extremely helpful and wanted to get this done.
Website design By BotEap.comNote: As real estate agents, we get very upset when it takes weeks and months to get a response from the lender regarding an offer on a pre-foreclosure home. Our buyers get upset. Our salespeople who try to save a shred of credit get annoyed. Everybody gets angry. However, from the position of the mortgage lender, they are completely overwhelmed and clearly understaffed. How could they not be understaffed? Who anticipated this 100-year economic collapse?
Website design By BotEap.comAppraiser destroys the hope of a single mother
Website design By BotEap.comDuring the review process, progress stopped. Suddenly my first report requires a second report on the house, the neighborhood, and the local market. The initial appraisal was grossly overpriced. I fought against that appraiser’s bad judgment with good research and precision.
Website design By BotEap.comWas this mortgage lender, Nationstar, in denial about poor market conditions? I don’t know.
Website design By BotEap.comWhat I do know is that in my second report to Nationstar, I simply wanted to write, “Take my first report and think WORSE…now you have the condition of the house, neighborhood, and local market from my first report.”
Website design By BotEap.comTwo months pass and Nationstar continues to receive a full price offer from a strong buyer who is putting up 60% cash.
Website design By BotEap.comBPO Bails Out Sale For Buyer
Website design By BotEap.comThe house, now owned by the bank, receives a second appraisal, this time from a broker who does what is called a BPO (broker price opinion) in late January 2008.
Website design By BotEap.comI kept sending them emails, always inserting factual information, not wanting to waste their time.
Website design By BotEap.comMeanwhile, Tess and the children remain in the house… a full two months after the auction. In fact, they moved last week to allow inspections to take place.
Website design By BotEap.comAs a courtesy for leaving the house in “broom clean” condition, Nationstar wisely provided the (previous) owner with $500.00. What a SMART business decision!
Website design By BotEap.comfear beyond fear
Website design By BotEap.comYou see, a lender’s fear today (and rightly so) is that a home in foreclosure will be destroyed and dispossessed. Yes, it really is happening… and it’s happening more often every day.
Website design By BotEap.comLast week I previewed a house for a lender and couldn’t believe my eyes…broken windows…shattered kitchen (not a cabinet…not an appliance…not a counter…not a one lamp…nothing!)…bathrooms destroyed…thousands of holes in the drywall…holes in all the ceilings…no carpet…torn tiles!
Website design By BotEap.comWorse yet, the stench was unbearable…even from outside the house…the worst “sewer” smell you could imagine. Was it because all the bathroom fixtures were gone? Was the faeces spread throughout the house… also on the walls?
Website design By BotEap.comI couldn’t leave fast enough, and the photos certainly didn’t do this “crime” scene justice.
Website design By BotEap.comOh, by the way, this is a house in a $700,000 neighborhood… a neighborhood called “exclusive.” Was this vandalism? Or was this an angry homeowner who lost a house?
Website design By BotEap.comThat is not my research or problem. However, here is a fact. Similar situations are happening… other real estate agents are reporting similar horror stories and not just in Florida.
Website design By BotEap.comAngry would-be homeowners are destroying and stripping their homes before handing them over, often forced to leave by the Sheriff. Vandals and vagabonds are destroying and squatting.
Website design By BotEap.comAnd mortgage lenders must decide to repair the damage or sell “AS DAMAGE” (not even the typical AS IS).
Website design By BotEap.comWhat happens to a neighborhood wrecked by a couple of foreclosures, causing values to plummet 25-50%? From mobile homes to palatial homes, this epidemic is crippling Florida (maybe the country?).
Website design By BotEap.comThe worst is yet to come.
Website design By BotEap.comMortgage lenders can’t hire enough loss mitigation staff. Out of necessity, mortgage lenders are telling pre-foreclosure homeowners to list for 90 days (or more) before even considering a short sale. Forget “deed-in-lieu of foreclosure”: Most lenders won’t accept “deed-in-lieu of foreclosure” properties.
Website design By BotEap.comWhat is the solution? Well, here’s one, and I’m sure this proposal will stir the pot and automatically be dismissed as unfair, weird, and even impossible. Impossible? Impossible is what we are witnessing on Main Street and Wall Street. Flippant is rightly believing in this market. That is creepy and irresponsible.
Website design By BotEap.comHere is my common sense approach, which clearly lacks any formal education in finance or economics:
Website design By BotEap.comAdjust mortgage payments and mortgage amounts to current prices. Do it now! Instead of ongoing write-downs and economic collapse, keep people in their homes. Give them a certificate for the difference between your mortgage amount and the present value (for example, you owe $348,000; present value $268,000; certificate $80,000).
Website design By BotEap.comInsist that they cannot sell for a year unless absolutely necessary. Therefore, they receive a credit (certificate) of $80,000. If they sell within four years and the value of their home has recovered to $338,000, they receive a credit of $10,000.
Website design By BotEap.comIt’s fair? Of course it’s not fair. Neither is the recession we’re in that the “LEADERSHIPS” of this country refuse to admit (not enough quarters of negative growth).
Website design By BotEap.comAsk any child who is not from a privileged family, and you will get the truth. That child will tell you, hopefully without using the “F” word, these are tough times and they’re about to get tougher.