I recently talked to someone who did a loan modification with HSBC. I couldn't believe how easy the process was for them. They didn't have to wait 60 days for a person to be assigned to the file. They didn't have to fill out an entire "package", the fax machine worked, and everything went smoothly. HSBC has been wonderful to work with on short sales. Obviously the easy to work with nature of their bank also applies to loan mods. Now, let's contrast this with a large American Bank, such as Bank of America or JP Morgan Chase.
Bank of America is awful. I have countless stories of real estate agents working on Bank of America short sales since August or September 2009. They still can't get a reasonable answer on the short sale today.
Bank of America and JP Morgan Chase are especially bad. Want an answer to an e-mail? Be prepared to wait 1-2 weeks for that. The people are all overworked. What happens is that everything becomes incoherent. In my opinion, the reason these companies don't care is because they don't own the loans. Bank of America only owns 20% of their loans.
And a lot of those are probably guaranteed by the government because of their purchase of Countrywide. Contrast this with HSBC. They own most of their loans. That means they are the ones losing money. I couldn't find HSBC ever getting a bailout on the bailout search page. They have a well run bank. All of their loan mods, short sales, and foreclosures are handled properly. Here is why.
They are acting as a principal. If they do a lousy job, they lose the money themselves. On 80% of Bank of America's loans, someone else is losing the money. That is why nothing ever gets done on a Bank of America file. It's like monopoly money. Do you think a teenage kid is going to "hot rod around" in his Dad's fancy sports car?
Come on! We all know his Dad will treat his car a lot better than someone else will. So, we can agree that people do a better job if their own money is on the line. The big banks are handling other people's money. There is no accountability. The investors just hear that the market is bad. They don't know that that is only half the story.
At HSBC, if the short sale department does a lousy job, it affects HSBC's quarterly statement. If things go bad, then people are held accountable. In my opinion, there is nothing of the sort happening at American Banks such as Bank of America or JP Morgan Chase.
It's kind of sad that a foreign company does a better job than an American Company. Are you an investor who own a mortgage, or do you work at Fannie Mae, Freddie Mac, FHA, VA, or some other place that owns loan? Here are the standards I would force the lender handling your loans to apply for short sales and loan mods.
Short Sale Minimum Standard: The buyer gets a written, solid, coherent answer within 60 days after they make an offer. If the buyer isn't willing to pay that price, then the house is listed at that price and the asking price is dropped by 5% a month until the home sells.
Loan Mod Minimum Standard: Give the homeowner a written, coherent answer on their loan mod within 30 days.
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Ben & Chris Curry The Short Sale Agent's Advocate
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