4/3/2009
Reader’s Question:
I’m really ticked off. Last year I was hospitalized for some severe health problems and had 3 operations. Thankfully, today I am alive and cancer free. What is really upsetting me is that with my battle to save my life, I had to endure a battle to save my home from foreclosure. With the mounting hospital bills, surgery bills, and being out of work for over a year, I could no longer afford to pay my mortgage.
With that said, I thought I would do the right thing and short sale my home. My friend is a Realtor and she assured me that she could pull off a short sale for me so that I would avoid a nasty foreclosure proceeding and further damage to my credit. Long story short, we received 4 offers to buy my home and the lender rejected all of them. After 8 months, the lender foreclosed on me and I lost my home.
The purpose of my email to you today is because I feel duped and cheated. Why you might ask? Not because of the foreclosure but because of the lenders current actions. The 4 offers my agent submitted to the bank were above $400,000. Today, I drove by my former home and it is listed for sale as an REO foreclosure and the asking price is $299,000. WHAT ??? How could the bank refuse $400,000 and then list it for $299,000? Why would the bank choose to lose an extra $100,000? I am so angry it’s beyond belief. Is it just me or am I nuts ?
Christian’s Response:
Reader, trust me, it’s not you that is nuts. This is just another great example of the gross incompetence that leads the banks and lenders in our country. The small minded individuals that make many of the short sale decisions have little sense of true reality. They sit in high rise luxury buildings and get served gourmet lunches. That is why it is of upmost importance to hire an experienced Broker/Realtor that specializes in short sales (or what is known as or referred to as, loss mitigation) that can assist in bringing a dose of reality to the forefront. Not just your average Realtor that has his or her picture plastered on all bus benches and your generic open house special, rather a Realtor that has a proven track record and can show you actual short sale lender approvals in writing.
It would be unfair and irresponsible for me to place blame and point fingers in all directions as I do not have all the specifics of your short sale request but, I can share with you the following thoughts. There are approx. 600,000 Realtors in California. Approx. 1,400 are true short sale specialists that are SS certified with a proven record. The players know each other and interact with each other from within. We share stories, experiences, and network with each other constantly. I’m sure the realtor you chose was a wonderful agent and did the best that he or she could but many do not have the knowledge or the know how in dealing with the banks. Lenders speak a certain language and they absolutely know when an agent is savvy and aggressive verses one that they can mold and take advantage of. If they get the feeling that the Realtor is a "new comer," you can bet your bottom dollar that the lenders will ride that agent like a mule and squeeze the life out of them. Let’s face it, what bank enjoys losing money? You can’t necessarily blame them. Oh, sure you can. The lenders themselves created this mess and absolutely knew that this crisis was before us. Nevertheless, they continued down a path of destruction handing out money to anyone that could breathe. Negative amortization loans, 1% loans, no questions asked loans, you name it, they funded it. If you could spell the word CAT, you got a loan.
Sure the bank could have experienced a smaller loss by selling your home for $100k over what they are selling it for now but why would they care? Just create another weeping session before congress and get another bailout. The banking staff that is responsible for accepting or declining a short sale can care less about true losses. It’s not their money. They will continue to get their pay check every Friday. It means nothing to them. It’s your life they ruin, not theirs. Hire a professional. Hire the best representation known to mankind and there are many reputable loss mitigators to chose from. Remember, it’s not always the homeowners fault. The lenders have no one to blame but themselves. Thank you for attempting to do the right thing and being responsible. My best wishes to you and your health.
