Administration To Pressure and Incent Banks on Short Sales, Foreclosures

By
Real Estate Agent with Weichert Realtors 0225104373

In the ongoing saga of Short Sales and Foreclosures, the Obama Administration plans to announce this week a carrot and stick approach to deal with the issue.

650,000 borrowers have signed up for temporary loan modifications under the federal Making Home Affordable program enacted earlier this year.  However, it is estimated that only a fraction of the borrowers who are eligible for the program have a "permanent" loan modification, and that many individuals are being told that their bank "doesn't participate" in the program.

In addition, short seller's, who have a legitimate hardship such as a job loss or medical issue, are being told "that's not my department", and "I will get to it later", when dealing with big banks.

With an estimated 20% of all home owner's currently owing more on their homes than the market value, "short sales" aren't going away anytime soon.

So far the big banks have implemented a sort of "hide and seek" approach to short sale transactions, in the hope that some home buyer's and seller's would give up, and find another way.  

One of the lesser known, but equally as important reasons the First Time Home Buyer's Tax Credit was expanded and extended, was that the Halls of Congress were swamped with angry phone calls from constituents who waited month's for a bank's response on a short sale, only to be given misinformation, wrong information,or in the case of some institutions, outright lies.

After it came to light, that many of these "bailed-out" financial institutions were awarding big bonus's to corporate executives, while at the same time, dragging their feet on loan mods, and short sales, public outrage has pressured both congress and the administration to be held accountable to these now partially "publically owned" institutions. 

Johnny "Culdesac" Yankoviak

11/30/2009

www.johnnyculdesac.com

 

 

 

  

Posted by

Johnny Yankoviak

Weichert Realtors

7900 Sudley Road

Manassas, Va 20109

www.JohnnyCuldesac.com

an equal housing opportunity

Comments (4)

Steven L. Smith
King of the House Home Inspection, Inc. - Bellingham, WA
Bellingham WA Home Inspector

I had a friend complain about that last night. They have given him zero answers on his loan modification paperwork that has been at the bank office for months now.

Nov 30, 2009 01:08 PM
John Culdesac
Weichert Realtors - Manassas, VA

Thanks Steven,

Unfortunately, it's a common compliant. 

Did you notice how quickly Wall Street came hat in hand when they needed cash, but when a home owner admits to being in over their head, and needing to sell, the big banks don't work so "efficiently"?

How quickly they forget that if it weren't for the good ole U.S. Taxpayers, the biggest offender's in this ordeal wouldn't even be in business to "drag their feet". 

Johnny "Culdesac" Yankoviak 

(ps-great picture by the way)

Nov 30, 2009 01:28 PM
David Pannell
CITIES - A Real Estate Brokerage - Fort Worth, TX
Broker Extraordinaire

Have you heard of the banks wanting to move away from Short Sales all together. I recently heard from a lender I use that the statics show it is actually better to foreclose instaed of loan mod or short selling.  He mentioned they all want to go towards a auction style of sellling much like the HUD homes system. Any thoughts?

Dec 02, 2009 12:50 AM
John Culdesac
Weichert Realtors - Manassas, VA

Hi David:

How are you doing?

No, I haven't heard that.  Here in Northern Virginia, most of the big banks have said they would rather do a loan mod. or a short sale, and that they lose too much money to cash based investor's, when they go throught the foreclosure process.

Johnny

Dec 02, 2009 09:55 AM