"Home Wreckers -- How Banks Are Making the Foreclosure Crisis Worse...What Happens Now?" is Business Week's lead story this week (Issue of Feb. 23, 2009). Finally, a major national publication has picked up on and researched the dirty-and-getting-truly-filthy story of how banks are handling bank-approved sales and foreclosures: And I quote: "One reason foreclosures are so rampant is that banks and their advocates in Washington have delayed, diluted, and obstructed attempts to address the problems....The industry strategy all along has been to buy time and thwart regulation..."
Any agent who has handled one of these transactions knows all too well how the system works -- or doesn't. To participate is like falling into Dante's inferno head first. My first experience of this type, two years ago, handling an abandoned, falling-down property that the old WAMU had inadvisedly refinanced at more than $1,000,000, had 6 worthy buyers over 18 months, but no real opportunity to close. Strange obstacles conjured by the lender would enter the picture and buyers would disappear. After waiting months for a bank response, they would scream, cry, rage against the machine and then just give up. After a while - and hundreds of phone calls to the "Home Preservation Department" -- I figured it out: Something is rotten here, something so big and terrible I wouldn't be able to fix it.
Okay, I so get it now, and it makes me mad. At this point, like most agents, the mere thought of dealing with a foreclosure (or, even worse, a short sale) makes me hyperventilate. Today, we Realtors are on the front lines of helplessness and hopelessness. We see it everywhere, desperate homeowners without resources, losing everything they've striven for. Neither they nor we can get a straight word from a bank. Showing these properties is a trial, but I just planned my schedule for tomorrow. Half the houses I'll show are in jeopardy, most are empty and forlorn, many have been vandalized. On our end, caring is not nearly enough. Neither is submitting an offer, because the powers that be aren't really interested in getting the job done. In my mind, that would be enabling new families to embrace empty properties as their own for fair market value; or, even better, keeping beleaguered homeowners who are still hanging on, right where they belong.
Business Week reveals that banking lobbyists are renewing attacks against possible legislation to adjust overblown mortgages that should never have been issued and help homeowners get back on their feet. The nation's banks are apparently threatening to raise interest rates and reject future borrowers in retaliation for so-called "cramdown legislation" because, they say, it would "destabilize the market." I don't buy that, do you?