I was speaking to a real estate agent from another state and he was venting about his experience dealing with a short sale.  After 6 months in escrow and next to action from the lender he is told that the loss mitigation guy who was working the file had 3800 files to work.  Let me say that again 3800 files!

I am not a rocket scientist, but logic tells me that if you truly want to move these properties you would bring in some warm bodies to work these files.  There is no shortage of out of work loan officers and real estate agents who are more than qualified to process paperwork.  The time they are sitting on the market is losing value at a greatly higher rate than it would cost to hire a few more employees.

So what could be their motivation for so little action?

  • Could it be that they are delaying showing the losses on their books?
    • Would their bonuses be directly impacted by that?
    • Are they trying to withhold the full truth from their stock holders?
  • Are they trying to break the housing market even more to get more of the bailout money?
  • Are they just that incompetent?

No matter how you explain what the big banks are doing, their lack of action is causing the problem to get worse.  The amount of time these homes sit and rot on the market is causing everyone else's homes to drop in value around them.  They are making the purchase of one of these short sale, pre foreclosure or REO homes so painful that most buyers and real estate agents try to avoid them.

They are causing so much harm to others and entire communities by their actions or lack of actions; it may only be a matter of time before some legal types see a way to make a buck and go after them.

 

--------------------------------------------------------------------------------------------------------

Randy L. Prothero, REALTOR®, Broker-in-Charge, ABR, AHWD, CRS, e-PRO, GRI, SFR

Keller Williams Realty

 

Randy Prothero is well established as an expert in working with military / VA clients and first time home buyers.  His home seller's (listing) campaign is one of the most aggressive marketing programs in the area.

Based out of Mililani, Hawaii. Randy services the island of Oahu (Honolulu County) Performs mediations and ombudsman services for the Board of Realtors.  To improve overall professionalism in his area Randy also offers classes for real estate agents. 

 

www.HawaiiRandy.com *  Oahu (Honolulu County) Property Search  *  Hawaii Military Relocations

 
This post has been included in Hawaii Real Estate News
Post is included in group: Almost Anything Goes
Post is included in group: Hawaii Real Estate Professionals
Post is included in group: Mortgage, Foreclosure & Elder Abuse Housing Fraud
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32 Comments on Lack of Action by Banks is Causing Harm

20 Most Recent Comments Displayed Show All

NOV
20
2008
804,030 Points 20 Featured Posts Outside Blog Attended Rain Camp Called Shot Master

Gotta believe they are stringing things out...until the free money comes!
6:33pm • #13
1,362,346 Points 244 Featured Posts Outside Blog Attended Rain Camp Called Shot Master

Randy, all good questions.  For what ever their reason is, they are making it very frustrating on everyone else.
7:45pm • #14
120,167 Points Localism Sponsor

I have been wondering about these same questions.  There has to be a reason why the banks are not getting more people in to move these files along more quickly, and delaying the loss on the books makes sense.

My other gripe is how long banks take to respond to offers on foreclosure.  I have one right now that is two days past binding acceptance, but the listing agent keeps telling us to hold on, hold on, should have response tomorrow.  This happens with almost every foreclosure offer I have done lately, and it is not right.
7:53pm • #15
655,247 Points 29 Featured Posts Localism Sponsor Outside Blog Attended Rain Camp Called Shot Master

Randy, I don't understand why these are called short sales.  Every one that I have done has ended up being a long sale.
10:06pm • #16
NOV
21
2008
597,029 Points 106 Featured Posts Localism Sponsor Outside Blog Hit Router

B.B. - I think that the politicians could earn their pay if they force the banks to take action.

Myrl - I think they have had enough time to develop a plan.  They have chosen to not fix it.

Pete - Act 137 is another blog or a series of blogs all by itself.  That is a perfect example of what happens when you elect too many lawyers.
9:45pm • #17
597,029 Points 106 Featured Posts Localism Sponsor Outside Blog Hit Router

Gary W. - It would explain their lack of action.

George - Besides frustrating they are injuring many people in the communities where they have this dead inventory.

Brenda - I have an offer on an REO that they verbally accepted more than two months ago and we still have not opened escrow.  I will not mention names but their initials are CW.
9:48pm • #18
597,029 Points 106 Featured Posts Localism Sponsor Outside Blog Hit Router

Marchel - I think our industry should take you suggestion and start calling them long sales.
9:50pm • #19
NOV
24
2008
168,188 Points

Randy

Great Blog in Florida I'm dealing with the same problems...the banks are overloading these workers and thus causing great delays and even worse scaring offe ready and willing buyers...
10:25am • #20
597,029 Points 106 Featured Posts Localism Sponsor Outside Blog Hit Router

Tim - They are definitely making this problem much worse than it needs to be.
12:24pm • #21
NOV
25
2008
738,077 Points 231 Featured Posts Outside Blog Attended Rain Camp Called Shot Master

Randy... I think every point and reason that you gave is right on... even down to the arrogance level... and being incompetent.  Very sad indeed....  good insight here. This needs to be mentioned in the media more often and look at by congress more often. To me, it seems like the gov't needs to stronghold the investors just like a bookie would stronghold someone that owes them money.

jeff belonger
9:27pm • #22
NOV
26
2008
597,029 Points 106 Featured Posts Localism Sponsor Outside Blog Hit Router

Jeff - I agree that the media needs to cover this side of the story a lot more.
2:16am • #23
NOV
28
2008
809,276 Points 7 Featured Posts Outside Blog Called Shot Master

We're lucky we are not one of the states that is really hard hit.  They have no excuse for being so bad at what they do.  As you say, there are plenty of industry types out of work that could help.
8:08pm • #24
597,029 Points 106 Featured Posts Localism Sponsor Outside Blog Hit Router

Georgina - There is really no reasonable excuse.
10:08pm • #25
NOV
29
2008
269,182 Points 72 Featured Posts Outside Blog

Randy - this is a good post and your frustration is registered. In the defense of lenders I will say I have spoken to my counterparts (Directors of Operations and VP of Operations) from all across the nation and we have conversed about this. Ramping up really would not fix the problem quickly and in fact could make it a much worse situation than it is. Part of the problem is so many inexperienced investors and agents submitting short sales packages that are either ridiculously low offers or incomplete/incorrect packages. Contrary to popular opinion warm bodies will not "cut the mustard" and it would take too long for most out of work loan officers to get up to speed and in the meanwhile they would bog down the system even more. Yes, it is a HUGE problem and it would be wonderful if that solution would work. Even though anyone can become a "Certified Loss Mitigation Specialist" for only $2995 they wouldn't have the first idea how to really be a loss mitigation assistant. So let's encourage people making offers to know what they are doing and make offers that aren't so ridiculously low they will only waste time for realistic offers like I am sure most AR members make.
4:57pm • #26

I have to agree with Jesse. Banks do not want to book these losses, especially when many are critically low on capital already.  Look to the banking crisis in Japan during the 90's for a lesson on how long these things can take to work out.  That took only, oh, about 15 years. 
7:37pm • #27
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Ken - In one case the bank had 3800 files on one persons desk.  There is no way on earth that anything will move with that situation.  The problem will continue to get worse.

The ability to submit the packet properly is a problem.  The lenders do not have people available to assist agents and seller's better learn and navigate through the process.

Brian - I am sure that is a big part of the problem.  Unfortunately by the way they are currently handling the situation they are digging the whole even deeper and it will take even longer to recover.
9:05pm • #28
NOV
30
2008
207,923 Points 2 Featured Posts Outside Blog

Banks are overwhelmed. Never did they prepare to be real estate investors. or to have loss mitigation departments. It is going to take some time for the banks to learn and staff people to handle all of this
10:10am • #29
597,029 Points 106 Featured Posts Localism Sponsor Outside Blog Hit Router

James - They have had at least 2 years.  How much time do they need?  We will be in the next cycle and they will be behind on that one too.
1:05pm • #30
DEC
09
2008

Did you send an email link to this blog entry to all the banks out there? LOL
8:14pm • #31
DEC
10
2008
597,029 Points 106 Featured Posts Localism Sponsor Outside Blog Hit Router

Russel - They don't answer their messages now.  It would be a waste of time sending it.
2:20am • #32

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Randy L. Prothero - Hawaii REALTOR® (808) 384-5645

Island Style Realty Inc. - "The Prothero Group"

Mililani, HI

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Island Style Realty Inc.

Address: 94-539 Puahi St., #B, Waipahu, HI, 96797

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