Short Sale Rant...

Excellent post, Anthony !  Your common well thought out approach makes way too much sense !  Like the advice dad had for you ! 

For some its called "creative thinking", and for others its called "thinking about yourself."  I like the old fashioned worker, get paid for what you work for, but work for what you can get paid for.  I'm not sure where this is going, but its unfortunate that too many things are being done at the expense of others.   Thanks for sharing your thoughts in your blog.  Lu 

The biggest problem is that the lenders didn't anticipate the magnitude of short sales and foreclosures. They took a hard stand early in the game and only now (after their underqualified staff (as it relates to real estate sales) is completely overwhelmed) are they willing to be more realistic. But it's too late. The loss mitigators are completely buried and can't find their way out of a paper bag. I truly believe some have just let the short sales go with the attitude "we'll deal with it when we own it."

Some lenders are beginning to see that they MUST begin negotiating with their borrowers to stop the bleeding but it's too little too late.

Tony- as usual, a thought provoking blog.  But I beg to differ.  This is how I understand the mess we got in.  I am going to put it in simple, blatantly anti-intellectual terms (because that is how I learn better):

1.  Banks gave money away (loans) to poor people.

2.  This process was done using 'financial instruments' that were not regulated.

3.  It turns out banks (because of the lack of accounting rules) were closer to insolvency (or ability to back up loan by cash) then anybody knew.

4.  Once the States realized what was going on they were unable to stop the banks because of "The Office Of the Comptroller of The Currency."  This 'office' was a government agency approved by congress.  This not only emboldened the banks, but it also allowed them to shift the burden of guilt.

5.  Congress, it turns out, is 'assisted' through campaign contributions by the banks and brokers whose wealth depends  on fending off the financial police.

6.  As of now, the big banks....with the permission/and or desire to look away from the treasury department.....are being allowed - on their own - to decide how much safety capital they should hold.

7.  This is the reason  we are in the trouble we are in, to begin with.

For quite a while I assumed Realtors were among the main culprits for this horrendous mess.  I now see a larger, more corrupt picture.  Money that only exists on some banker or broker's  computer screen is called 'click-click cash' and money that you can actually touch (and take out of a bank) is called 'suitcase cash.'

Could it be, irony of ironies, that this mess was created....click click....in a vacuum of financial greed and irresponsibility?

And we do know how nature feels about a vacuum.

Hmm.

Tony:  I so understand your pain.   I have a buyer I've been representing and we just got acceptance after 4 1/2 months.  Then I have a short sale listing which I have an offer on.  I've submitted the paperwork three times, and finally got their approval to send the paperwork by federal express.   Every time I call, I'm hold for 30 minutes, and get a different answer from everyone I talk to.  It's definitely an exercise in patience.

 

Tony,

How about a market where 64% of all the homes sold this year where short sales or owned by banks?

This is a common market in a lot of the mid west, and openning in other select markets soon.

I had to laugh, on your opening line, a great reminder of the "golden days" of real estate....2005! lol

Hang in there, we practise in interesting times.

You are right on in your assessment & wouldn't it be great if the banks would use some common sense.  Instead, they make the actual value of the property less, because no motivated buyer can wait a month for a response.  I know a guy who is a professional short sale buyer, he has closed over 175 of them for his own personal profit.  He said that when he deals with them that they will let the properties go at 50% of current market value.  Wouldn't it make a lot more sense to the bank to let us market them at a realistic pre-approved value, sell them to a motivated buyer who would love to get a deal at 90-95% of market value, and then everyone is happy!

 

Tony,

I feel exactly the same way you do, it all makes me sick to my stomach, In my old market this started really in 2002 I am pretty sure the term Short Sale was coined in Flint MI in early 2002, by the number one repo lister, is a "short seller". Short sales have become a business model, not a tool to help the occasional desperate seller. I am still on the Board of Directors of the Flint (Michigan) Area Association of Realtors, I have been trying to convince our local, state and national boards that this was going to be a problem since early 2003, they laughed. NAR is useless.

The banks really are in Real Estate now, they are sellers and the sellers with the lowest prices and they are running many markets, dictating how the listing is entered into mls to decieve the public (yeah, no one will figure out Bank-Owned means REPO!!).

CYA on anything having to do with a short sale and even foreclosures any more.  Keep rocking call if you want to vent, I have some great, great stories.

 

 

Hey, you forgot get a commitment from a person who doesn't work in that department a week later, and have to start all over again!

Tony - You hit a nerve!  Banks have for too long evaded criticism because they are like the 'churches' in a religion.  In reality, they are the Money Lenders.  And if I remember correctly, somebody kind of lost it one day and kicked their tables around a bit at temple.

I keep forgetting that:

Schools are a Business.

Hospitals are a Business.

Religion is a Business.

And why not see it for what it is:  Banks are a business.