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Short Sale Lender Loses $50K Refusing AUCTION CASH

Property facts:

Brand new 3,600 Sq Ft custom 5 bed 4 bath home on 1.1 Acre lot in exclusive subdivision with no POA fees or hassles outside Snow Hill in Worcester County Maryland.

New Home equity erosion

$535,000.00 Pre-construction appraisal June 2006

$485,000.00 loaned July 2006

$3,600.00 only payment made on home August 2006 before the seller lost his job

$347,000.00 BPO Pre-foreclosure Broker Price Opinion January 2007

$351,000.00 February 2007 Auction cash on the table 30-day AS IS close

$421,000.00 Amount Freemont Savings would accept for a short sale

$394,000.00 March 2007 Foreclosure buyback amount on Courthouse Steps

$331,500.00 September 2007 REO Sale Amount to buyer who discovered property through auction marketing & dealt direct with REO management company (not lender) and beat them down $20,000.00 AFTER $50k foreclosure expenses and property damages.

The lender had been contacted and prepared for a ‘short-sale' by the auctioneer who delivered a complete package. The lender Freemont Savings was given a ‘cease and desist' by the FDIC to stop 80% - 20% sub prime loans such as this during the marketing period and laid off thousands of employees.

The Village of Nassawango is a very desirable community with senior county officials and many business executives calling it home for the large lots, secluded atmosphere, and private community setting without the hassles of expenses of a home owners association.

As one of only 321 Accredited Auctioneers of Real Estate (A.A.R.E.) in the USA the level of service offered by my company simply higher than 99.0% of the real estate professionals in the marketplace are capable of offering.

Lenders still refuse to deal with reality

Posted by Billy Burke, CAI - AARE on 12/08/2007 05:18 PM

Comments (7)

auction, realtor, debt over equity, mortgage, auctioneer, auctioneers, short sale, the industry standard

This post has been included in Maryland Information Worcester County, MD Information Snow Hill, MD Information
Post is included in group: Real Estate Auction Referrals

7 Comments on Short Sale Lender Loses $50K Refusing AUCTION CASH

This is an amazing story.

It just shows the myopic thinking of the banks and mortgage houses. They have been calling the shots for so long, they are not capable of acknowledging the fact that they are either going to take losses on these sale or choke on them.

Wonderful post. You spelled it out perfectly. I could just watch the price slide down.

I flagged this for feature. Good luck.

12/08/2007 05:27 PM

by Lenn Harley, Homefinders.com, MD & VA Real Estate

Interesting story that shows auctioneers can do everything a Realtor can, just faster!

12/08/2007 08:56 PM

by Jason Smith Iowa Hunting Properties and Farm Land (Whitetail Trophy Properties)

Hey Billy,

Are you getting away with charging no sale fees out there? I haven't been trying, but just got a call from a consumer seller and I've been thinking about it.

12/09/2007 08:42 AM

by Rich Kruse (Gryphon USA, Ltd.)

very interesting. This is the type of info we need to help us understand what is going on.

12/09/2007 12:08 PM

by Melanie Ross, GRI Benicia Ca & Vallejo Ca Real Estate (Coldwell Banker Solano Pacific)

Rich:

Yes we charge no sale fees and this was right at $10,000

But the seller was broke, in foreclosure and had moved.

We settled for the new stainless steel refrigerator - freezer combo that they were going to lose anyways because it was personal property.

We will not accept an auction listing without the no-sale fee clause

Jason:

The marketing comparison of what we did as auctioneers compared to the listing realtor was night and day.

Melanie:

The problem is worsened by the NAR sending out press releases saying property values hve only dropped 1.2% to 5.6% when the truth is they have dropped 20% to 60% across the board.

12/09/2007 01:06 PM

by Billy Burke, CAI - AARE (REauction.com The Industry Standard)

I had one very similar $135,000 owed. The house froze when the tenant left. We got an offer for $60,000 and fought with the bank for 8 months about it as all other offers were far less. The bank finally said yes and at the last minute 5:30 pm on Monday they called and said if you don't close it tomorrow (Tuesday) the deal is off. The crazy thing here is that we had the closing scheduled for Thursday at 2 pm. So i told them if they don't take this deal they will lose far more it fell on deaf ears. 6 months later after many price reductions by the REO agent the home sold for $40k. As the saying goes a bird in the hand is worth 2 in the bush. Well if you calculate out all the costs involved with it that is about right. There is little intelligent life at a bank.

02/19/2008 07:58 AM

by Jason Childs of The Short Sales Group,LLC

Great post and story, thanks for sharing. Auctioning is an area I am watching and doing research on. Bookmarked.

03/01/2008 07:06 AM

by Rosemary Brooks -Mother & Daughter (866)-750-8282 (Family Realty Group - 866-750-8282)