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Is The FDIC Killing Short Sales?

Is The FDIC Killing Short Sales?

As some of you already know, I blogged recently about being interviewed recently by our local NBC news affiliate. To read the blog, click here. Basically, IndyMac Bank (now OneWest Bank), is holding one of my clients hostage, demanding a $75k promissory note, or they will proceed to foreclosure. For the life of me, I couldn't figure out why they were doing this. The BPO came in at the contract price of $275k, with a net to IndyMac of $241k. What advantage could there possibly be for them to proceed to foreclosure?

Yesterday, I figured it out. You see, IndyMac was taken over by the FDIC and sold to OneWest Bank in March/2009. Guess who the investors are behind OneWest? George Soros, Michael Dell, Steve Mnuchin (former Goldman Sachs executive), and John Paulson (hedge-fund billionaire).

Now, listen to the deal they got from the FDIC....

Basically, they purchased all current residential mortgages at 70% of par value (70% of the outstanding loan amounts). They purchased all current HELOCS at 58% of Par Value!!!

Next, in order to "sweeten the pot", the FDIC stepped in and guaranteed the following: For any residential mortgages where OneWest experiences a loss, the FDIC will step in and cover anywhere from 80%-95% of the loss. The loss is calculated using the ORIGINAL LOAN BALANCE, not the amount that OneWest paid for the loan. Let's use my clients situation as an example:

Loan Amount is $478,000, plus 6 months of missed payments, for a grand total of $485,200

OneWest pays $334,600 for the loan

We have an all cash offer of $241,000, net to OneWest.

So, let's do the math, shall we? The net loss, according to the FDIC formula is the ORIGINAL LOAN AMOUNT minus the amount of the offer. In this case, $485,200-$241,000, or $244,200. Next, the FDIC, according to their Loss Share Agreement, writes a check to OneWest for 80% of the so-called "net loss". So, in this case, OneWest gets a check from Uncle Sam for $195,360 (.80 X $244,200).

Add the $195,360 to the sales price of $241,000, and you get a grand total of $436,360. Remember, OneWest paid $334,600 for the loan. So, OneWest puts $101,760 in their pocket, thanks to the FDIC. Folks, that is over $100k of our hard-earned tax dollars!

So, you ask...Why does this program hurt short sales? Because, our brilliant government offers this SAME PROGRAM FOR FORECLOSURES! The only difference is, the government picks up 80% of the tab on all of the extra costs associated with a foreclosure (BPO's, upkeep, utilities/maintenance, legal fees, etc.)

So, If I'm OneWest, why would I want to waste my time negotiating through a Short Sale, when I can make the same amount of money (if not more) by just letting it go to foreclosure? And we wonder why nobody can get a Loan Modification? Why would OneWest approve a loan modification for this guy, when they can foreclose and make over $100k? And, to add injury to insult, they have held this loan for 6 months! Not a bad ROI, huh?

What infuriates me the most is that in my particular case mentioned above, they have the guts to hold my client hostage for a $75k promissory note, after they are already making more than $100k on the sale!!! This is his primary residence, 1st Position loan, and OneWest has NO RECOURSE! Imagine if they could make $100k, then get a deficiency judgement! Talk about making some big bucks!

Can you say "GREED"?

The scary thing is that over 50 banks have Shared Loss Agreements in place with the FDIC. Some of them include: Bank of America (go figure), CitiMortgage, Wells Fargo, etc.

This entire agreement between the FDIC and OneWest can be found here, on the FDIC website. It's all there, for the world to see! They have it all layed out. All of the formulas, worksheets, etc.

Now, it's up to us to bring it to the attention of our elected officials and the media. Enough is Enough!

UPDATE 9/18/09: I JUST READ AN AWESOME ARTICLE ON THIS, THAT GOES INTO WAY MORE DETAIL THAN MY BLOG ABOVE. TAKE THE TIME TO READ IT WHEN YOU GET A CHANCE! CLICK HERE TO READ IT.

Wait, it gets better...The FDIC just announced that it needs to start borrowing money from the U.S. Treasure in order to replenish it's deposit insurance fund (the same fund being used to pay all of these banks in the Loss Share Agreements). Go Figure! Click Here to read it.

Robert G. Hertzog

Phoenix Real Estate Consultant

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Posted by Robert G Hertzog on 09/17/2009 01:49 PM

Comments (86)

OneWest Bank Shared Loss Agreement in the Sales Strategies / Tactics Channel

shared loss agreement, fdic, onewest bank, short sale, foreclosure

Originally posted at: THE HERTZOG BLOG: Is The FDIC Killing Short Sales?

This post has been included in Arizona Information
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86 Comments on Is The FDIC Killing Short Sales?

SEP

Thanks for posting this. It makes sense as to why perfectly good short sales are being denied. You and Sidney Jimenez might want to get together!

SEP

Sidney and i have talked on the phone before, and he's definitely "got it together" when it comes to the whole short sale process. Unfortunately, the reality is that a select few of us can't change what is going on. If everyone having these problems would blog, contact their elected officials, the media, etc., and get the word out, maybe we could change some things? This particular "Loss Share Agreement" issue is just a "tip of the iceberg". The bottom line is that our government continues to reward bad behavior, and until this changes, we will continue down the same path.

To give you an example, there are almost 100 people (probably most of them fellow Real Estate Agents) that have "clicked" on this post as of today. You are the only one to comment thus far. If I were to guess, I bet that not one of those 100 people chose to take any further action.

As not only someone in the Real Estate Industry, but more importantly, an American Taxpayer, you would think that information like this would be a "call for action". Instead, this information will quickly be forgotten by others who feel that this is someone else's problem. It's truly a sad testament to not only the attitude of those in our industry, but to the general American public as well.

I'm sorry for my "rant", and I sincerely thank you for taking the time to comment. I've noticed that you've commented regularly on blogs like this, and I really do appreciate your involvement. If only we could get more people to step up and try to change things....

It was a great post. However, you are right. It will be forgotten while asinine blogs get featured. It's a shame too. This is great information and anyone doing short sales should be made aware of it. There are two books that really opened up my eyes. One I read 7 years ago called "None dare call it a conspiracy" and the other just recently called "The creature from Jekyll island". It's amazing how many Americans are not aware of what is going on in their own government.

SEP

I couldn't agree with you more. The intent of the blog was to inform "anyone doing short sales", as you said. It literally took me the better part of two days to conduct the research, and I'm glad I did it. However, when I look at some of the "featured" blogs, I'm still left scratching my head, wondering what it takes to get exposure in this forum. i don't know about you, but I am more apt to appreciate a blog post that features research and facts that will help me to help my clients, much more than a blog post that talks about the worn out "I fired another client today" scenario. Or, the "Buyers need to buy before the $8,000 tax credit runs out" blog. I dunno, just my opinion, for what it's worth.

I actually sent an email to AR this morning, trying to explain the importance of blogs like this. Obviously, there is no intent on my part to develop exposure to me or my company. There isn't a single link or reference to anything related to our company, other than my company logo, which I always put in all of my blog posts. The blog was written to inform other agents and the general public of what our government is doing to us/them. Unfortunately, it obviously is lacking in the "wow" department, and wasn't featured. I'm the first to admit that I'm a "newbie" to the whole blogging thing. Hopefully, someone at AR will be able to give me some advice on how to get blogs like this more exposure in the future. In the past, they have been great in pointing me in the right direction, and I'm sure they will step up once again..

With all that being said, I think the lack of response is, unfortunately, a result of the "dumbing down" of our society as a whole. Nobody thinks they can change things anymore, and that really scares me.

To top it off, I posted this same blog on Trulia at the same time I posted on AR. To date, I've received the same amount of "clicks" and outside responses, and emails as I have on AR.

Thanks again for sharing. I'll take a look at the two books you referenced.

Here's the cliff note version of the creature of Jekyll island:

http://www.youtube.com/watch?v=7auQEXTWomA

SEP

I just watched the first two, and I ordered the book. Great suggestion!

Bob, THANK YOU, I was beginning to think I was losing my grip:

http://activerain.com/blogsview/1247938/indymac-one-west-bank-is-it-my-imagination-or-are-they-doing-all-possible-to-stonewall-this-short-sale-

I'll confess I've been so busy making myself crazy trying to get my clients through the morass of these transactions I haven't been spending time in A/R form some time. IndyMac finally pushed me over the edge.

I'm not sure if this made me feel better or worse, but at least now I know: NO, I'M NOT IMAGINING THINGS!

Thanks for the excellent article you linked to as well. Very illuminating.

I also found the Jekyll Island video compelling...have bookmarked to go back and watch the rest of the series.

Thank you for a quality post, I for one think it should be a FEATURED POST!!!

"Wait, it gets better...The FDIC just announced that it needs to start borrowing money from the U.S. Treasure in order to replenish it's deposit insurance fund (the same fund being used to pay all of these banks in the Loss Share Agreements). Go Figure!"

Trust me, when you read these two books, you would have predicted this and expected this from the beginning. What's worse, once you start down this rabbit hole, you'll find yourself Googling people like Norman Dodds and then finding yourself one step away from being mentally unstable (or aware)!

Beth, you're not losing your grip, you are just seeing the reality behind the whole process. THANKS FOR CONTRIBUTING! Now, it's your turn to spread the word. Don't fall in the trap of thinking your voice won't matter. On another note, I envy you for being able to live/work in what I feel is the most beautiful place in Arizona!

Satar, I'm seriously nervous about reading these books, for the reason you explained. But, I feel I NEED to read them. Quite frankly, I'm sick of burying my head in the sand like every other American citizen, and it's time to wake up to reality. Thanks again for sharing, and I'm looking forward to reading more.

SEP

Bob-thank you so much for this post! There are so many factors that are interfering with short sales these days. I had never looked into this FDIC/OWB agreement but I'm amazed. There are so many things going on in the bank/servicer/lender "underworld" and the little guy is the one paying for it while the banks position themselves as victims. I agree that it's going to take some noise being made...enough is enough in my opinion.

SEP

BIG NEWS!!!!

I just got a phone call from the PR firm that represents OneWest Bank, AND THEY HAVE AGREED TO REMOVE THE $75,000 PROMISSORY NOTE AND PROCEED WITH THE SHORT SALE!!!

I guess sometimes the "squeaky wheel gets the grease"....

Great Job!!!! That's just great!

SEP

Great info Bob thanks for the blog, hang in and work for your people!

Yes, great info, I thought it was featured, and was looking for it in the "featured posts", as I saw it the first day just briefly and then wanted to finish it and leave a comment. (It should be featured). There is so much confusion about short sales and why the banks are holding onto their inventory. I am passing this one on!

SEP

Hi Jane, I can't figure it out either. I sent an email to the AR folks almost a week ago, but no response. No biggie. I've had some GREAT conversations over the past few days with other agents, as well as reporters from everything from a local paper in the Sacramento area to the Wall Street Journal. Most of them found me through the same blog on Trulia, of all places! Kinda funny, but the blog on Trulia has received more views and just as many comments as it has received on AR. And, it comes up higher in the google search.

This whole loss share issue is getting ready to hit the general public, and I can't wait for it to happen. I think/hope that when the taxpayers hear about it, they not only question it, but do something about it.

Brian, thanks for taking the time to read it. I hope you can spread the word and make a difference!

Satari, thanks again! I'm still waiting on my Jekyll book to get here from Amazon!

Another Quick Update.... I just got a call from Business Week Magazine, and they are running an article on my case in next week's issue! With a circulation of 4.9 million, I think loss share agreements are finally going to get the attention they deserve!

SEP

This is in fact despicable. I am going though a similar situation with BofA on a loan they inherited from Countrywide. The short sale approval binds the seller to a deficiency from them, the investors and/or the insurance (pmi/mip) behind the loan PLUS they may be subject to having to sign a promisory note. No choice or offer to accept a 1099 instead is made, based on what is more appropriate for their particular case and pursuant to the advise the borrower may have received from their attorney or tax professional. This is most definitly, not my idea of government looking out for its people, but instead, a hard case of trampling people instead. I'm now starting to fight the approval and seek the remedy the borrower feels is best for them. Here's someone without other assets or work, fearing he's now going to have to fight an expensive long fight on something he thought will be finally behind him after the sale. I hope Obama, our government representatives, the FDIC and other watchdogs are reading these posts! Great job!

The FDIC a watchdog? They're the watchdog for the banks, not the people. The only reason why we have a FDIC so people don't make a run on banks and help the big players with their "mergers", such as what they did for JP Morgan with WAMU or what they did for Mellon Bank with Philadelphia Savings Fund Society in the early 1990's (just to name a couple in downward markets). ;)

Bob - To quote a Jefferson Airplane song "Feed your head"! Leat me know what you think when you are done.

SEP

Bob--FABULOUS news about Business Week! Inspired by your post, I looked into the agreements posted on the FDIC site and blogged about it as well. The FDIC became obsessed with my site/post (visiting my blog post over 20 times in just over 2 days). I took it down, but not sure that I should have. I can't wait to read the Business Week story!

Well, I may have spoken too soon on OneWest actually cooperating with us. They are now choosing not to respond to my emails & voice mails. So, it looks like we are back to square one in my case. They agreed to eliminate the $75k promissory note, but wanted a close of escrow 6 days later, which we know is impossible (especially with a family living in the home). So, I may have gotten excited over nothing after all. I've contacted the PR firm again, so we'll see where it stands. They were told the story was breaking on Friday, so maybe they are ticked. Who knows?

SEP

Hi Bob,

I just now this this post, and all I can say is WOW! But at the same time I'm not at all shocked. I guess that's the cynicism in me. Thank you for pulling this info together.

Thanks for the write-up! it all makes perfect sense, I just couldn't get around to understanding why banks were soo bad at processing shortsales..

we should have all pooled 20 Billion and bought the bank..

Disgusting.

Incredible!!!!

Thanks for the link to the FDIC detailed info about the sweetheart deal. It's a little complicated for me to figure out but it looks like you are spot on with your analysis.

And so it goes... corruption begetting corruption. There is a time coming when all will be exposed. Congratulations on uncovering a small enough piece that you and your people got what was deserved. Keep fighting Bob. Blessings.

Wow, is putting it mildly. I wish I new how to make more people aware of this. Thanks so much I am going to talk it up as much as I can.

Thank you for that blog!

Do you have the list of the other 50 or so banks?

the FDIC does not have to conforming to the FDIC guidelines as a bank would. They also spend a lot of time unravaling the mess the failed bankers left behind. If the FDIC takes down a bank you are working on a shortsale on, I would stop working on it.

Too many buyers, sellers and agents are experiencing "short sale wonder". We wonder what could possibly take so long? Your blog has clarified some issues. Best of luck getting your short sale to closing.

"The creature from Jekyll Island" is a book that's been brought to my attention several times lately; time to read it.

Bob,

I don't know why this didn't get featured. What an eye opener. Now I know what I'll be researching for the rest of the morning.

When I was 4, I wondered how ariplanes worked. When I was 8, I wondered how rocketships worked. When I was 16, I wondereed how brain surgery worked. For the last 2 years, I wondered how short sales "worked." Now I know. Thanks Bob!

P.S. I still don't understand rocket surgery or brain science. Can you do some research on that?

I encountered my own short sale nightmare and ended in foreclosure with Wells Fargo and Countrywide back on 10/08. They held me hostage for 100K....and eventually did foreclose. Now Wells is holding me hostage again with $91,000 on my credit report as a charge off. Countrywide did report properly.

Many of my associates in the business are under the assumption that short sales are getting closed and banks are dealing. They say my situation was during the beginning of this nightmare and it is much better now. NOT! You and many of us now that is not the case.

Yes, a great majority of taxpayers don't even care about these issues. It is above their heads or something.....but WE NEED TO SPEAK UP....WE NEED MORE BLOGS like this one.

Thank you for the links and honest reporting...Hey, if real estate does not turn around maybe you can become a journalist and report the facts simply and honestly.

Thanks for the comments. Now, go out there and do your part to spread the word!

Well this is definately a joke and I am going to reblog and repost this and try to spread the word the best I can this is just wrong

Oy My God. This is another reason why 'if you're not outraged, you're not listening'. I am reblogging this.

Bob, Maybe you should advise your clients to go through the full foreclosure process which could possibly take upto 30 months for the Bank to get their home back if there that greedy!!!!!!!!!!!!

Thanks so much for this information. For the last year I have been wondering what the issue is with short sales this go around when they seemed to be fairly easy in the last real estate drop in the '90s. I have been saying all along "follow the money". Now I know where to look for it.

I don't like the idea of government conspiracies, but the older I get and the more I see the government doing, the more I am likely to believe in them. It is definitely scary...

This is one more thing we need to be aware of as we discuss short sales with our clients.

Thanks for laying it all out. I have a friend who has been trying to explain this to me, and I kind of dismisses this "conspiracy theories" just to find out that maybe, things really are worse than we think and that the government is corrupt to the bone. Appreciate you being courageous enough to come forth with this information!

I thought there was hope there for your clients when I read the bank removed the $75K promisory note but now they are not answering your calls.

I had a feeling something like this was going on. I have several short sales with offers and I am not getting anywhere with the banks. Two are with BofA, formerly Countrywide. Each day there are several "Back on the market" short sale listings. The buyers are walking away from the short sales and bidding on foreclosures.

This is very maddening and I agree wall all need to contact our local congressmen about this.

Well written and I will reblog with hope more will read...

A quick update on my client's case. OneWest has agreed to eliminate the $75k promissory note, and has extended the closing to 10/30/09. Business Week Magazine is looking at running an article on our case in this week's edition, but OneWest told them today that my client's loan is not owned by OneWest, but another "undisclosed investor", so his loan would not fall under the loss share program. This, after telling me on more than one occasion that his loan was in fact owned by OneWest. Who's to say? If they will not disclose who owns the loan, we'll never know. So, Business Week may decide not to run with it as a result. It's really too bad, because I feel it's important to get the word out to our citizens, and Business Week, with a circulation of 4.9 million, would have been the perfect venue for it. I'm still keeping my fingers crossed, but not holding my breath.

Either way, there are now 53 lenders who have loss share programs in place, including Wells Fargo, Citi, BofA, etc. And, more importantly, there are a whole bunch of Realtors that now know what to look for when dealing with these lenders.

I'm blown away by the responses and the amount of you that have chosen to re-post the blog. My intent was to spread the word, and it appears to be spreading like a wildfire. Keep it up!

Bob -

I just wanted to say ... GOOD FOR YOU for going back to AR on why they weren't featuring a post as TIMELY AND INFORMATIVE as this one. This is the kind of information we need to read and share more of.

Thank you for the GREAT POST and my very best wishes on a successful closing on your OneWest transaction, Diane

Hi Diane,

Thanks for your comments. Bob from AR did call me this morning, and explained the process of featured posts. Unfortunately, this one "slipped through the cracks", as he said. I'm just glad that my post from last night made it to the featured level. It has reached a ton of people!

Wow, where do I sign up. Talk about about a no downside investment.

I knew that they were stalling on short sales and taking peoples houses back because they were still making money on it by removing peope from their homes! I knew it!

Unbelievable! What's happened to ethics? There was a time when people were governed by ethics & ran their business based on ethics. We didn't need to have specific laws telling us exactly what's acceptable & what's not. It's really sad that the dollar is more important than what's right.

B-O-O-I-N-G ! ! What an eye opener! I want to send this to my representatives!

Okay, I just found this post as it was reblogged. I, too, will reblog this post, as this post is so well written and so clear that even I can understand the sweetheart deal. Finally.

I am incensed. I work so hard, and have all my life, just like my parents did, and I don't think my tax dollars are being well spent, but then, I never have.

Bob: This is such a eye opener and it is scary and it is probably is going to get worse before it gets betterl Thanks for being our watch dog.

SEP

Bob -

Thanks a million for laying this story out there to see what sleaz is going on.

A Quick Update... I just received word from Business Week Magazine, and they ARE going to run this story after all. The reporter said that he is not allowed to discuss publication dates, but he promised to send me an electronic copy as soon as it is finished. Once I receive it, I'll be sure to post a new blog so that all of you can take a look! I hope that some of the major news outlets pick up on it once it hits the magazine!

Thanks again for all of your comments and feedback!

Bob

OCT

Great, informative post. Here I've been thinking these bank folks were just plain stupid the way they've been making our lives (and the lives of our sellers) so miserable. There's apparently method in their madness. It's our government officials who need their heads examined (now there's a surprise!)

I'd love to re-blog this, but don't really know how reblogging works??

Bob, I'm in for reblogging this also. And, I'll be sending a link to some of the lenders around here, too. Makes a person want to throw up in the bushes.

OCT

Hi Bob, really great work and congratulations on the Business Week Magazine article. This is a story that everyone should know.

As for being featured by AR, it appears AR does not want to promote causes. I put together a blog on misleading advertising and received notice that it was featured but it never made it to the Featured List. Thats ok because there are other ways of getting your message out to AR members.

I will be reblogging this at least once a week and featuring it in my daily market update on AR and from my site.

Just learned something, you can only reblog once; the reblog button is gone. Never fear there are other ways.

Bob - Thank you for outlining exactly how this works.

I am so livid about this I could scream. We are being screwed royal by are own government and by the alleged politicians who love the little people.

I am a Red, White, and Blue Capitalist. I believe in America, Free Enterprise, property rights, the rule of law, and the rewards of hard work. I am working harder than ever and making less and the government is giving away money to the rich and making my job harder.

These elitist rich bastards are laughing there ass off and if any every get caught or prosecuted they are looking at short club fed time. But as it is all done under the color of authority and law there is no crime.

I want to see heads roll!

Bob - Thanks so much for conducting the research on this subject. We all knew there must be some reason for the delay in getting short sales closed. For some reason, this information does not surprise me. There are always people making deals behind the scenes in order to make a few bucks off of others. What makes it worse is the it is the government, and they are doing it to people in distressed situations.

OCT

Incredible blog.

It is outrageous what goes on between the banks and our government... Shame on them..

By why would they have shame if they are making SO much money AGAIN,

Bob THANK YOU! This was a VERY informative post. I appreciate the link to the FDIC site which lists all the banks they have agreements with. I found this post while reading another of your posts that had a link. Great research and even better synopsis of the situation. This definitely should have been a featured post. Any agent who is conducting short sales should be armed with this information. Thanks again.

OCT

Bob, this is great information and certainly EXPLAINS A LOT! It makes sense out of what I am experiencing with my short sales, the only thing that has made sense. Like putting the pieces of a puzzle together, now I can see the picture. I found this post reblogged on Brian Brumpton's blog.

OCT

Active Rain is also a major news outlet so you have gotten the ball rolling. This agreement is not in our best interest. The banks win with it.

Thanks for a great piece of information Robert. I have done a number of successful short sales and have had consistant success until I ran into a deal with OneWest Bank.... Now I understand. The only comment I have is that I think the culprit is not the banks but the politicians who allow these backroom deals to be made. The banks got into trouble because of our regulations (or lack thereof) and now the politicians are making deals with the bankers which, yet again, hurt the regular folks like us and our clients who are loosing their homes.

OCT

One West Bank received my sister's mortgage loan from IndyMac Bank and have refused to doa loan modification on the property as their lawyer informed them that their investors were holding onto their money and worried about spending it. This blog just enlightened me. The bank and its executives want to foreclose because it nets them much more profit. I can't belive the government is allowing this... I hope the banks regain honesty.

OCT

this is unbelievable...or should I say, totally believable in this new world of twisted reality. I just began the short sale process two days ago with a WF client, and now wonder if I am prolonging their agony. CW, BofA..I don't bother with anymore, do I add WF to the list? Thank you so much for this..going back to your links now..and wondering for the third time today what kind of world I am leaving to my kids...

It happening with other lenders as well. I am in the middle of a similar situation... it is really frustrating... I am giong to read the links... it is difficult to comprehend all of this.

OCT

This is one of the best blogs on the short sale subject I have seen! The best part is how you backed up what you've said here with links to the facts. Nice job! I've been doing short sales for almost 2 years now and every time I learn something more about what they are doing and why I just want to screem! Or throw up, take your pick.

This blog is the final straw for me. I have had it with the banks taking advantage of a situation that the government created for them AGAIN. Here is another link on you tube that I found. I know you'll find it as facinating as I. www.youtube.com/watch?v=eAaQNACwaLw

I have been watching the Tea Party organizations from afar for a while now. If you believe the media you'd think they are all crazy radicals. I finally went and was pleasently surprised, and joined a local chapter. Their purpose is to educate people on the REAL issues, not the smoke screens.

As Realtors dealing with short sales, we are front and center to witness the flagrant misuse of the TAX PAYER funds that the banks were given to cover their losses on short sales, loan modufucations. There is no excuse to insist on taking a property to foreclosure when the homeowner is cooperating??! THE BANK'S LOSSES HAVE ALREADY BEEN COVERED! And yet they are still combative, at best with the very tax payers that bailed them out!!!

The only way we can fight this is to make our voice heard. The TEA Party stands for; Taxed Enough Already! They mean it, and they are serious. Fiind a group and support it, they are doing great things!

Keep blogging, you are doing great things too!

I had to reblog this on my site just so more people can see it ! AMAZING !

OCT

Do you have any information on National City and or ING ?

Bob, This post should most definitely be featured. I think you should repost it. I promise you, I'll click on the flag beneath your post and recommend it as a feature (not that I have any power here, but if enough of us do that, it will likely get featured). Thank you for doing all this research. I was blown away by this.

OCT

Thank yoyu for laying this story out there to see what is really going on.

tHANKS FOR THE INFORMATION... IT IS ALOT TO UNDERASTAND. ILL HAVE TO RESEARCH THIS FURTHER. THANKYOU

OCT

I have a short sale that needs to be listed in the Phoenix area. Please email me back at Scottabenson@gmail.com if you are interested in listing for my seller. I have a buyer in place that is ready to make the purchase and negotiate with the bank.

OCT

I don't thing this Comment section is the place to post anti-Obama conspiracy theory.

Let's all just stay on point with short-sales, foreclosures and solutions that we can all use to get our clients the best deals possible and leave the other stuff out.

Let's use this for suggestions of how to deal with the banks and what is successful!

OCT

Hi Fred,

I just glanced through the comments quickly, and I'm having a hard time finding anyone posting "anti-Obama conspiracy theories", like you said. I think everyone has done a pretty good job of staying on task here. That being said, thanks for checking in, and commenting!

Bob, some will see what they want or need to see regardless.

Do you have any read on how widespread impact of the bankers using shared-loss agreement really is? Given the recent Connecticut indictment (www.mortgagefraudblog.com/ee-assets/my-uploads/NATERA.pdf ) of several Realtors doing short sales apparently for their own accounts, do you see this as escallation of an effort to thwart short sales, or an isolated event like the California indictment of the short sale/loan mod outfit back in June? In my (cynical) view, making a living from picking up the (financial) crumbs depends a lot on knowing which way the (political) wind is blowing. JMO, YMMV

Thanks for posting the link Bob. It makes me sick to my stomach when I hear of Realtors participating in scams like that, but it's going on everyday, even right here in AZ. Just two weeks ago, I had the pleasure of dealing with a licensed RE Agent who tied up one of my short sale listings for almost 5 months. When we finally received lender approval, she dropped us a week later, and only 30 days from the foreclosure date. Actually, she was the Buyer for the deal that this blog is about. So, after all of that hard work, she dropped us like a hot potato. Luckily, we were able to find a cash buyer, no contingencies, and the deal is going to close on November 6th.

I did a little research and found out that this Realtor had 4 Notices of Trustee Sale filed against her in 2009. All of the properties were rentals, and all were listed with another RE Agent in her office as short sales. All of them closed, resulting in losses to the lenders in excess of $1 million. The bad part is that we had a letter from her bank, stating that she had $275k cash in the bank to purchase our short sale. In addition, on all of her notes that she signed with the lenders, she claimed that all 4 homes were her personal residence. Two homes were purchased in 2005, and two homes in 2006. I wonder if she disclosed this to all of the lenders that accepted her short sales? I seriously doubt it.

I was so infuriated that I decided to send the case to the AZ Attorney General, the AZ Dept of Real Estate, and the FBI Mortgage Fraud Task Force. The Attorney General wrote back, stating that this was an AZ Dept of Real Estate issue. The AZ Dept of Real Estate wrote me a letter stating that no RE laws were broken. I have yet to hear back from the FBI Mortgage Fraud Task Force, but I'm not holding my breath.

With so many homeowners having legitimate hardships out there, it ticks me off to see someone else scamming the system. It's people like this that make it so hard for us to deal with lenders. And, to think that she is a licensed agent makes my blood boil even more.

I wonder why this isn't featured. Thank you for the insight. I found this by clicking on a link from a featured blog, and am very glad to have located this info.

OCT

Bob,

Please see a link in your original post (http://mandelman.ml-implode.com/2009/09/liberal-billionaire-george-soros…-major-shareholder-in-indymacone-west-bank/) to see what I was talking about.

The first word is Liberal and it tells the President F You. Not good, not smart and not mature and practical.

Fred - The relationship between banks and Government crosses both party lines. It is not president specific. Also, you quoted/referenced the colorful metaphor out of context. The author was stating that was the bank's response to the president after being bailed out. The author wasn't attacking the president.

Fred, your comment was....

I don't thing this Comment section is the place to post anti-Obama conspiracy theory.

Let's all just stay on point with short-sales, foreclosures and solutions that we can all use to get our clients the best deals possible and leave the other stuff out.

Let's use this for suggestions of how to deal with the banks and what is successful!

I simply responded that there were no comments in the comment section that had anything to do with "Obama Conspiracy Theories".

You decided to dig deeper, find a different blog that was linked in my blog, and, as Satar said above, twist it around to make it sound like the author was telling the President to F You, with the intent of trying to tie my blog with the other. Kinda "chicken-sh**", if you asked me. That being said, the beauty of AR is that it allows/encourages open communication. There are those that come here to try and find fault in blog posts, and others who come in to contribute, share, and learn from others' experiences. To each his own.

I'm proud to say that this blog has received almost 10,000 "clicks", and 78 out of 80 positive comments/remarks (your two comments being the only ones that were negative). I have received countless emails, phone calls, etc., from RE Agents, mortgage brokers, and homeowners throughout the country, that found my blog to be very factual and to the point. I'm sorry if you were offended by the remarks that someone else made about Obama. I agree wholeheartedly with Satar, this mess started long before the new administration took office, and is being continued as we speak.

Well said Bob. Thanks again for this factual and very insightful look at real things happening in real estate. Understanding how the relationship between these lenders and the government works, and how it directly ties into our government's (which happens to include Obama) decision to be financially involved, is monumentally important! These relationships affect everything we do with short sales, and there is pleanty of blame on both sides to go around equally.

The true test will be, now that this information is coming out, let's see who in our government can grow a back bone, reject what is wrong and stand up for what's right.

OCT

Wow this is such an eye opener, very sad for everyone that this is happening.

Yvette Sloan

OCT

I haven't read all the comments but those I did seem to agree that there is a lot wrong with the whole short sale scenario.

I have been battling with BoA since August with a short sale which looks like it's going down the pan. I realize this is a relatively short time but what is obvious from my communications with BoA is that they are using delaying tactics; each time I call I get a different reason why the process is stalled. At no time have I been given the same story. I had one supervisor tell me that the guidelines keep changing!

I remember having a deal fall through with WAMU; at the last minute they pulled the plug. WAMU went under. Then Countrywide were negotiating a deal, I had the buy side, and CW closed the file. My buyer bought the property several months later for less money than originally offered and not from CW. CW went under. CW took over WAMU. BoA took over CW. Is BoA too big to fail? The way they are behaving looks like a repeat of WAMU and CW; except for the "Loss share agreement" which will make them richer, and the rest of us poorer.

So much for our Democracy, we live in a Plutocracy. "They" are the slave masters and we are the slaves.

NOV

Completely agree with everything you have said! Good luck with the closing on the deal, hope everything works out!

NOV

Here's an update on funds the FDIC is getting from banks, which relates to their cash flow involvement in short sales:

http://www.washingtontimes.com/news/2009/nov/13/banks-to-prepay-45-billion-to-insurance-fund/

Cheers!

- Brian, www.foreclosuregrove.com

NOV

this market is crazy - thanks for the info - not suprising.

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