Over the past few years we have all seen our share of foreclosers. But it is very frustrating when a seller tries to do the right thing only to get shut down by the bank.
Here's an example of just how the banks refuse to help homeowners. Why they should not be working in the real estate industry. How much money is really lost. And how they totally screw up the rest of the market.
- M/M seller build a new home in 2005 in a new sub in Shelby Township Michigan - total investment $320,000 mortgage balance $236,000 and $59,000
- 2 years later Mr homeowner loses his job But finds work outside the state and continues to make payments. So the family can remain together they list the home Jan of 07 (they have a baby on the way)
- Market continues to drop, owner agrees to continue reducing price and come to closing with money
- Sept 07 owner no longer able to hang on and misses a payment and requests short sale. Price now $275,000
- Nov 11, 07 1st offer $245,000 bank drags it's feet 1st buyer walks Jan 25, 08
- We fight bank on BPO they get Freddie Mac to reduce to $250,000
- Home Back on market
- Mar 15th sheriff sale owner has 6 month redemption
- Mar 26, 08 2nd offer $240,000 bank dragging feet again
- Finally May 6, 08 bank approves short sale on 1st and 2nd but owner must bring money to closing
- June 9, 08 buyers lender unable to approve home due to FHA guidelines of "site condo" (that's another story) 2nd buyer gets cold feet and walks
- Home Back on Market
- July 13, 08 3rd offer $240,000- bank promises they will work much quicker this time
- Calling or emailing bank 3-4 times a week
- Customer service missing documents from previous file, new person on every call, no ability to talk directly with negotiator. We realize these people are totally incompetent
- Aug 29. 08 buyer needs to get kids in school - bank moving to slow - 3rd buyer walks
- Home Back on Market but seller has now moved out of home and out of state (it's been one year)
- Sept 4th negotiator calls and states "I will place this file on my desk and if another offer comes in I will personally handle it". She gives us her direct e-mail.
- Sept 5th 4th offer $240,000
- Calls and emails daily to negotiator, calls to customer service, calls to supervisor of negotiator - no call - no email nothing.
- Then on Sept 19 we are told by customer service they Can Not accept the offer due to redemption time expiring.
- Sept 22, 08 call from REO agent requesting information about home and seller.
- Oct 6, 08 REO agent for Freddie Mac lists home for $224,500.
They had $240,000 4 times and now it's on the market at a Give Away Price. This is totally unfair to the seller who now has a foreclosure on his credit, the 4 buyers who had their time wasted, the 3 co-op agents who lost commissions, us as listing agents who did our job and brought them 4 offers, spent hundreds of hours on the phone over the past year ended up with NO PAY and most important - the tax payers who will now foot the bill for the difference.
This was not a sub-prime mortgage, people with bad credit or someone that lied about how much they made. Just a young couple building their dream home and Trying to Do the Right Thing.
As long as Capital Hill is unaware of exactly what is going out there on Main Street, we will continue to see prices fall. I think NAR should step up and get these stories heard by congress.
Ed & Cindy,
I Highly suggest you make this an open blog so I can link to it from my lasvegasrealestate4u.com blog. I love to highlight blog posts of banks that screw up short sales -- so consumers can see what they are bailing out.
Making this a Members Only post prevents it from being seen by consumers who need to know what is going on and all of the hard work being done to try to prevent foreclosures (and even lower home values) from people trying to do the right thing in the first place.
Please let me know if and when you make it public so I can link to it with another blog post about the stupidity of bailing out banks that are not even helping themselves.
There are a lot more stories like yours that need to be shared...
That is horrible. Somehow the mortgage holders should be held accountable.
This head-banging aggravating. Stories like this should hit the front pages of the Detroit Free Press or Detroit News.
Paul - thanks for the tip and feel free to highlight this post.
Samanatha - mortgage hlders should be held accountable and disclosed on the Hill
Kris - if I could I would get it on the front page of every newspaper. People need to know why their values are going down andwhat the banks are doing to people while we bail them out..
Ed & Cindy,
What a great story for all to read. I can personally relate since I know this home at you know. This would be a great story to show homeowners who think its the agent who isn't doing their work when really it is the bank.