What a shock: Bank of America et all did almost nothing in response to the Obama administration ineffectual effort to encourage mortgage modifications (see this article).
It is a great disgrace of the Obama administration that nothing was really done to address the tragic collapse of the housing market, and the terrible impact this has had on hundreds of thousands of Americans.
A lame program was cobbled together, a press release was issued, and the suffering continued.
Instead, the Administration foolishly wasted a year on the unpopular health care reform. Maybe a good idea long term, but NOT while a bold, New Deal style program was really needed to help the many regions of the country that have been decimated by the sub prime collapse.
But what do you expect from a Treasury Secretary, and a President, still beholden to the Wall Street financial interests that contribute to their campaigns and staff their administration?
Thursday, June 9, 2011
Tuesday, October 26, 2010
Foreclosure Crisis and Short Sales
Short sales blues man has been on the sidelines these past many months, trying to renovate his new short sale house and expand the family that lives in it.
However, it's been painful not to chime in on the foreclosure mess (which seems to have been somewhat resolved now that the big banks have happily resumed foreclosing!).
Just a couple of days ago, the New York Times finally picked up on the related scandal involving short sales -- i.e., how the big banks are delaying or turning down short sales, which would avert foreclosure, because the fees they can make on foreclosure are too attractive.
OF COURSE! Why avert a foreclosure, when you don't even own the loan? Since most of the banks are acting as servicers, they have nothing to lose from foreclosure -- only something to gain from the fee involved.
Is it any wonder, then, that the big banks have invested almost no resources into their short sale departments? They are manned by overworked cubicle slaves. Faxes and documents are routinely lost. Phone lines go unanswered. Desperate borrowers, buyers and realtors on the other ends waste days and days trying to move their transactions through.
Obama's pathetic loan modification program did nothing to fix the problem.
I suspect that much of the Tea Party rage is fueled by people whose lives have been tragically affected by the real estate collapse. What's weird is that the anger would be channeled against big government, when big financial institutions are also the perpetrators, in collusion with big government.
However, it's been painful not to chime in on the foreclosure mess (which seems to have been somewhat resolved now that the big banks have happily resumed foreclosing!).
Just a couple of days ago, the New York Times finally picked up on the related scandal involving short sales -- i.e., how the big banks are delaying or turning down short sales, which would avert foreclosure, because the fees they can make on foreclosure are too attractive.
OF COURSE! Why avert a foreclosure, when you don't even own the loan? Since most of the banks are acting as servicers, they have nothing to lose from foreclosure -- only something to gain from the fee involved.
Is it any wonder, then, that the big banks have invested almost no resources into their short sale departments? They are manned by overworked cubicle slaves. Faxes and documents are routinely lost. Phone lines go unanswered. Desperate borrowers, buyers and realtors on the other ends waste days and days trying to move their transactions through.
Obama's pathetic loan modification program did nothing to fix the problem.
I suspect that much of the Tea Party rage is fueled by people whose lives have been tragically affected by the real estate collapse. What's weird is that the anger would be channeled against big government, when big financial institutions are also the perpetrators, in collusion with big government.
Friday, March 26, 2010
Epilogue: Short Sales and Frozen Pipes
Renovation on the short sale house has begun, and already I've learned a painful lesson.
The house is in Park Hill, Yonkers, NY, on a cliff overlooking the city, the Hudson River, and the Palisdades beyond. The nine months that it took to close the deal included several months of very cold winter. The heat and electricity were off. In early November, I had asked the sellers, via the realtor, to drain the pipes and winterize the house. The realtor got back to me and said that they told her that they had drained the pipes, although the realtor noticed that there was water in the toilet. The realtor responded by sending another note to the sellers, explaining the details of winterizing, and never got a response. She never followed up about the lack of a response, or reminded me of the importance of winterizing (something that's probably taught in realtor 101).
Well it turns out that they didn't drain the pipes. Not from the cold water. Not from the radiators.
So over the winter, the pipes froze and burst at many points, mostly at elbow joints. About five or six beautiful old cast iron radiators cracked.
So it took my contractor an entire week of turning on the water, finding a leak, repairing the leak, and repeating the process, to restore the houses plumbing system.
I haven't gotten the bill for this yet. And I'm not looking forward to it.
The moral of the story? Don't trust the seller of your short sale house to do anything that involves maintaining the house. And also don't trust your realtor, particularly if your realtor happens to be representing both buyer and seller in the deal. It's up to you to make sure everything that's supposed to happen, happens.
The house is in Park Hill, Yonkers, NY, on a cliff overlooking the city, the Hudson River, and the Palisdades beyond. The nine months that it took to close the deal included several months of very cold winter. The heat and electricity were off. In early November, I had asked the sellers, via the realtor, to drain the pipes and winterize the house. The realtor got back to me and said that they told her that they had drained the pipes, although the realtor noticed that there was water in the toilet. The realtor responded by sending another note to the sellers, explaining the details of winterizing, and never got a response. She never followed up about the lack of a response, or reminded me of the importance of winterizing (something that's probably taught in realtor 101).
Well it turns out that they didn't drain the pipes. Not from the cold water. Not from the radiators.
So over the winter, the pipes froze and burst at many points, mostly at elbow joints. About five or six beautiful old cast iron radiators cracked.
So it took my contractor an entire week of turning on the water, finding a leak, repairing the leak, and repeating the process, to restore the houses plumbing system.
I haven't gotten the bill for this yet. And I'm not looking forward to it.
The moral of the story? Don't trust the seller of your short sale house to do anything that involves maintaining the house. And also don't trust your realtor, particularly if your realtor happens to be representing both buyer and seller in the deal. It's up to you to make sure everything that's supposed to happen, happens.
Saturday, March 13, 2010
Short Sales: A Brave New World
Just because my deal got done, doesn't mean I'm going to stop this blog! I still have a few things I need to say.
First off: if you're thinking about a short sale, forget everything you ever knew about buying a house. It's not business as usual. These are new rules. And you'll be making up some of your own as you go along.
Maybe my experience is different than what other folks are seeing. I'm sure in places like California, Arizona, Florida and Nevada, epicenters of the subprime crisis, things may be a bit different than they are here in the Northeast. The volume of foreclosures and short sales is higher, so maybe buyers, realtors, lawyers and title companies have developed fairly standardized procedures.
In my case, there was no standard, because very few of the participants in the deal had ever done a short sale. Not my lawyer(s). Not my broker. Not the title company. My lawyer had never even heard of a short sale the first time I asked him to represent me (that was OK, he did a pretty good job despite).
What I learned, principle No. 1, is that it is up to the buyer to make it happen.
The seller doesn't have much to gain. They avoid foreclosure, and to some very limited extent minimize damage to their credit rating. In my case, the sellers were pretty nice people. They just didn't want to see a house they cared about in a neighborhood they care about get abandoned, boarded up and left to rot while the bank dithered. But still, they pretty much left it up to me -- and I don't blame them.
The realtor. The realtor has a lot to gain -- a commission. In my case, the short sale bank shaved the commission down from 5.5 percent to 4 percent. It's still a pretty good pay day. But it doesn't seem to be enough of an incentive to light much of a fire under a relators. Realtors are wired to do what they do: show houses, place adds, negotiate. Maybe there are some hard charging realtors in subprime ground zero who take the lead on short sales, but around here that was not in evidence. I suppose that the volume of real estate deals in the local market is high enough so that realtors don't have to invest too much time in short sale deals -- if they fall apart, the commissions are coming in from the conventional deals.
Next time: the lawyer.
First off: if you're thinking about a short sale, forget everything you ever knew about buying a house. It's not business as usual. These are new rules. And you'll be making up some of your own as you go along.
Maybe my experience is different than what other folks are seeing. I'm sure in places like California, Arizona, Florida and Nevada, epicenters of the subprime crisis, things may be a bit different than they are here in the Northeast. The volume of foreclosures and short sales is higher, so maybe buyers, realtors, lawyers and title companies have developed fairly standardized procedures.
In my case, there was no standard, because very few of the participants in the deal had ever done a short sale. Not my lawyer(s). Not my broker. Not the title company. My lawyer had never even heard of a short sale the first time I asked him to represent me (that was OK, he did a pretty good job despite).
What I learned, principle No. 1, is that it is up to the buyer to make it happen.
The seller doesn't have much to gain. They avoid foreclosure, and to some very limited extent minimize damage to their credit rating. In my case, the sellers were pretty nice people. They just didn't want to see a house they cared about in a neighborhood they care about get abandoned, boarded up and left to rot while the bank dithered. But still, they pretty much left it up to me -- and I don't blame them.
The realtor. The realtor has a lot to gain -- a commission. In my case, the short sale bank shaved the commission down from 5.5 percent to 4 percent. It's still a pretty good pay day. But it doesn't seem to be enough of an incentive to light much of a fire under a relators. Realtors are wired to do what they do: show houses, place adds, negotiate. Maybe there are some hard charging realtors in subprime ground zero who take the lead on short sales, but around here that was not in evidence. I suppose that the volume of real estate deals in the local market is high enough so that realtors don't have to invest too much time in short sale deals -- if they fall apart, the commissions are coming in from the conventional deals.
Next time: the lawyer.
Friday, March 12, 2010
This is the End
Today at around 1 pm. in a conference room in White Plains, NY, this drawn out fight came to a successful conclusion. We now own the house, in beautiful Park Hill, Yonkers, NY.
Wednesday, March 10, 2010
GMAC: The Worst of a Bad Bunch
GMAC took the day off today on helping borrowers with "loss mitigation" issues: i.e. thousands of desperate borrowers ripped off with subprime loans, facing foreclosure and subsidizing GMAC's bailout with tax dollars.
Call in mid morning, and a recording indicates that the "recovery department" is closed for training, with the exception of two windows: 8 to 8:45 am., and again from 4 to 4:45pm. Well it's 4:13 pm, and this is the outgoing message: "The recovery department is currently not available for incoming calls."
Truly a superbly managed, customer-centric organization!
Epilogue
At the end of the day, someone actually got back to me. I had placed three calls to the corporate headquarters tel. number, where I asked for the office of the CEO and got a person handling "escalated concerns." They tried to contact the person I was trying to reach, and that mus have helped. At around 4:30 - 5:00 pm, I heard from the guy I was trying to reach. He sent me an email that took care of my problem. The title insurance company had asked for a letter from GMAC stating that GMAC had no objections to other lien holders being paid off as part of the transaction.
Call in mid morning, and a recording indicates that the "recovery department" is closed for training, with the exception of two windows: 8 to 8:45 am., and again from 4 to 4:45pm. Well it's 4:13 pm, and this is the outgoing message: "The recovery department is currently not available for incoming calls."
Truly a superbly managed, customer-centric organization!
Epilogue
At the end of the day, someone actually got back to me. I had placed three calls to the corporate headquarters tel. number, where I asked for the office of the CEO and got a person handling "escalated concerns." They tried to contact the person I was trying to reach, and that mus have helped. At around 4:30 - 5:00 pm, I heard from the guy I was trying to reach. He sent me an email that took care of my problem. The title insurance company had asked for a letter from GMAC stating that GMAC had no objections to other lien holders being paid off as part of the transaction.
Monday, March 8, 2010
Barney Frank's letter to Bank of America and three other large banks
I'm honestly not that much of a Barney Frank fan, but I love his recent letter to the CEO of Bank of America and to the three other biggest bank CEOS, scolding them for being greedy when it comes to second liens that are involved in short sales.
Yes, only an obsessed man deeply involved in a short sale would really pay attention to something like this. But I have personally confronted the avaricious posturing of a major institution that is a second lien holder.
In my case, it happened to be GMAC, not on the list of the Big Four. It was GMAC that wouldn't accept BofA's $3000 offer for release of second lien, and it was GMAC that is squeezing a fairly substantial additional sum out of my coffers -- because they can. And GMAC is one of the sickest financial institutions and a major beneficiary of federal bailouts -- to date, not paid back.
It's a good thing that short sales are getting more attention now that we're getting close to the kick in of the HAFA rules in eary April. Why there was even a front page article in the NYT this morning on this aspect of the mortgage mess that has seemed way too esoteric for the general audience.
As to my own quest, which is supposed to end later this week, today was a day of minor progress. A hopeful initial negotiation with a potentially lethal parasitic lien holder. A scramble to obtain a totally unnecessary document that's being demanded by the title insurance company. But the end is nigh, and chances are decent there's going to be happy ending.
Yes, only an obsessed man deeply involved in a short sale would really pay attention to something like this. But I have personally confronted the avaricious posturing of a major institution that is a second lien holder.
In my case, it happened to be GMAC, not on the list of the Big Four. It was GMAC that wouldn't accept BofA's $3000 offer for release of second lien, and it was GMAC that is squeezing a fairly substantial additional sum out of my coffers -- because they can. And GMAC is one of the sickest financial institutions and a major beneficiary of federal bailouts -- to date, not paid back.
It's a good thing that short sales are getting more attention now that we're getting close to the kick in of the HAFA rules in eary April. Why there was even a front page article in the NYT this morning on this aspect of the mortgage mess that has seemed way too esoteric for the general audience.
As to my own quest, which is supposed to end later this week, today was a day of minor progress. A hopeful initial negotiation with a potentially lethal parasitic lien holder. A scramble to obtain a totally unnecessary document that's being demanded by the title insurance company. But the end is nigh, and chances are decent there's going to be happy ending.
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