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A Bank Accountant Thought They Saved a Few Dollars

By
Real Estate Agent with Mapleridge Realty, CT 203-206-0754 REB.0759001

A Bank Accountant Thought They Saved a Few Dollars

Earlier in the year I started to work with a distressed family on a short sale. They had been through an attempt at loan modification and were denied but the bank was willing to wait for them to attempt a short sale.

 

newburyWhen I made contact with their file manager, they gave me the bank's required number based on an appraisal done within the previous 30 days. It seemed high to me, but banks seldom move off their numbers within a short period of appraisal. 

With weeks passing and no offers due to pricing and the condition of the home, the bank decided to go to the auction process. A new number was gotten from a new appraisal which was still high. The auction procedures were also a bit excessive as potential buyers would need to allow a credit card charge of $2500 to enter the process and none of that money would be credited to the purchase.  After 2 bid rounds the auction process was put on hold.

 

Meanwhile, the ever desperate owners were getting the opportunity to try their loan modification again. The listing was removed from the MLS so the loan modification could be attempted. I heard nothing from the owners after that. 

This weekend, while showing homes near that property, I went by just to check on the family. There were no cars in the driveway, and the snow had not been shoveled after our recent snowfall. It was apparent that no one lived there, and the sign on the door from the property management company attested to them being evicted and the property foreclosed. 

Newbuey St

In walking around the back yard, there was a large tree that had fallen over the back of the house and had punctured through the roof. The house is now exposed to the elements and whatever value that accountant felt was in the house will be rapidly lost and this house will most assuredly be selling for far less than the last appraised value. 

A family on hard times has been displaced and will attempt to restore their lives where ever they have moved. The bank will write off  loss and maybe even collect on the insurance for the damage.

 

Had they allowed the sellers to do their loan modification, that house would still be providing shelter to that family, and with the tree falling on the roof, their insurance company would have done the repairs to keep the house weather tight.

We are not always successful when trying to close a short sale for a family. The job is easier when the banks co-operate and wants to resolve a tough situation. The job is impossible when the eyes viewing the files at a bank are short sighted and are just looking at a perceived bottom line. 

For want of a nail a battle was lost. In this scenario, some bankers decided that for want of a few dollars, a family was thrown out and ultimately the house was lost as well.

A Bank Accountant Thought They Saved a Few Dollars

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Edward (Ed) Silva
Broker Associate

Serving Central Connecticut Sellers and Buyers

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Comments (67)

Gloria Todor
Premier Property Sales & Rentals - Springfield, PA
& Doug Durren (484) 431-3686 in SE PA

Ed, It is so sad to hear of such short sightedness on the part of some banks. It never ceases to amaze me how some mortgage lenders can easily forget that the loan number is connected to a living human being.

Hopefully this family has landed on their feet in a good situation.

All the best in 2015.

Gloria

Jan 12, 2015 04:30 AM
Travis "the SOLD man" Parker; Broker/Owner
Travis Realty - Enterprise, AL
email: Travis@theSOLDman.me / cell: 334-494-7846

haaaaaaaaaaaaa - did someone mention a bank being "sensible".... Somehow, they make money despite the way they do business - at least Real Estate business!

Jan 12, 2015 04:30 AM
Jeanne Dufort
Coldwell Banker Lake Country - Madison, GA
Madison and Lake Oconee GA

wow - heartbreaking story, and thank you for sharing it. Making decisions "by the numbers" and ignoring the counsel of local market experts will rarely lead to good results.

Jan 12, 2015 05:01 AM
Rebecca Gaujot, Realtor®
Lewisburg, WV
Lewisburg WV, the go to agent for all real estate

I've read a lot of posts on short sales. I do not do them and will just give to an agent that wants to put their time into a short sale.

Jan 12, 2015 06:51 AM
Larry Johnston
Broker, Friends & Neighbors Real Estate and Elkhart County Subdivisions, LLC - Elkhart, IN
Broker,Friends & Neighbors Real Estate, Elkhart,IN

Good evening Ed Silva ,  That story sounds Oh too familiar.  And they wonder why homeless shelters aren't able to take care of everyone in need.  Many people are moving in with friends and relatives just to have a place to sleep.  The banks don't care.  They still have a home to go home to.

Jan 12, 2015 06:57 AM
Fred Hernden, CMI
Superior Home Inspections - Greater Albuquerque Area - Albuquerque, NM
Albuquerque area Master Inspector

This can be a cold business Mr. Ed.... I know one thing, they better fix that roof or they're gonna eat that property!

Jan 12, 2015 07:20 AM
Nick T Pappas
Assoc. Broker ABR, CRS, SFR, e-Pro, @Homes Realty Group, Broker/Providence Property Mgmnt, LLC Huntsville AL - Huntsville, AL
Madison & Huntsville Alabama Real Estate Resource

Ed, the "eyes at the bank" are more than short sighted! Sometimes I think the bank hires kids to make the decisions when dealing with distressed properties. I've had to deal with the same non-sense and it's very frustrating.

Jan 12, 2015 07:40 AM
Russ Ravary ~ Metro Detroit Realtor call (248) 310-6239
Real Estate One - Commerce, MI
Michigan homes for sale ~ yesmyrealtor@gmail.com

Sometimes banks are dumb and lose more money than they thought they were getting

Jan 12, 2015 10:22 AM
Lanre-"THE REAL ESTATE FARMER" Folayan
Samson Properties - Bowie, MD
I don't make promises.I deliver results.SOLD HOMES

I had a horrible experience with a short sale that I did like two years ago. Many of them don't know what the heck they are doing. Very frustrating. 

Jan 12, 2015 10:58 AM
Jeff Dowler, CRS
eXp Realty of California, Inc. - Carlsbad, CA
The Southern California Relocation Dude

Ed

Sadly another casualty by yet another short sale lender who apparently does not know what they are doing nor care. How frustrating, and senseless

Jeff

Jan 12, 2015 11:07 AM
Julie A. Black
KAUAI DREAMS REALTY Kauai Real Property Specialist - Kapaa, HI
CLHMS, CRS, GRI, Realtor, Broker

So true. We all have our short sale horror stories. I actually had one turned down because it wasn't on the MLS long enough. The buyers walked and I hardly get showing requests.

Jan 12, 2015 01:57 PM
ReadySetLoan Team
ReadySetLoan Condo Team LLC - South Windsor, CT
Residential, Commercial & Condo Financing Experts

Hi Ed - I bet it's tough for an accountant sitting at a desk (possibly halfway across the country) to empathize with the owners and their situation.  It's a numbers game and unfortunately, everyone lost in this game.

Jan 12, 2015 05:04 PM
Kimo Jarrett
Cyber Properties - Huntington Beach, CA
Pro Lifestyle Solutions

There isn't any emotion in the mortgage service business at this level, it's simply a job that someone is doing per the companies policies. Unfortunately, many if not most homeowners who are challenged with financial distress are reluctant to seek professional advice during the first stages of impending financial gloom. 

Many if not, most property owners could have avoided the unpleasant outcomes if they had simply consulted with an experienced professional at the first sign that a financial disaster might be on the horizon.

Jan 12, 2015 06:56 PM
Lyn Sims
Schaumburg, IL
Real Estate Broker Retired

I think it's basically because of a bad BPO. Maybe you should have requested another or do a 2/3 scenario. I have a short now where the BPO came in & the agent put down $4K to get the home in top shape. The house is utterly trashed with not a worthwhile thing left in it.

Don't know how to prove my point except by video of condition which I think we should start doing.

Don't know why some banks cooperate & come don't. The auction process has not worked in our area & needs to be thrown out the window.

Jan 12, 2015 10:51 PM
Kevin Mackessy
Blue Olive Properties, LLC - Highlands Ranch, CO
Dedicated. Qualified. Local.

As others have said it is a game of numbers and nothing more than some data on a page to a lot of these accountants.  The personal touch is lost. 

Jan 13, 2015 06:31 AM
Endre Barath, Jr.
Berkshire Hathaway HomeServices California Properties - Beverly Hills, CA
Realtor - Los Angeles Home Sales 310.486.1002

Ed what a sad story, I can hardly believe my eyes....Endre

Jan 13, 2015 11:12 AM
Debbie Reynolds, C21 Platinum Properties
Platinum Properties- (931)771-9070 - Clarksville, TN
The Dedicated Clarksville TN Realtor-(931)320-6730

This is sad and one of the many loopholes created in the short sale market. I don't do many as they take too much out of me.

Jan 13, 2015 11:34 AM
Dorie Dillard Austin TX
Coldwell Banker Realty ~ 512.750.6899 - Austin, TX
NW Austin ~ Canyon Creek and Spicewood/Balcones

Good morning Ed,

Congratulations on a well deserved featured post. Its such a sad story and one that can really take a lot of the homeowners and those trying to really help them through a rough patch in life. Common sense..common sense..appears banks just can't practice common sense!

Jan 13, 2015 09:16 PM
Doyle Davison
Hawaiian Beaches Hawaii - 714-968-6767 - Huntington Beach, CA
30 years as your Concierge services listing broker

I just hope the family recovers.. they are more important than a corporation

Jan 16, 2015 12:40 AM
Claude Labbe
RLAH / @properties - Washington, DC
Realty for Your Busy Life

So sad, on so many levels.

I've been in a few cases where the ticking of the clock was surely stressing out all parties. Usually, when I'm involved, it's been a short sale, which does cause more harm than a restructure; though not nearly as much as a repossession.

Jan 17, 2015 10:55 AM