Good Afternoon from Chicago, folks! Hope you're enjoying the weekend.
A crazy turn of events this past week has left my head spinning regarding Mortgage Lender Priorities, and whether major banks really have the mettle, or any desire, to play a real part in getting the U.S. past our ongoing Housing Crisis.
Here in Chicago, short sales are everywhere. In some Chicago Neighborhoods and Suburbs, they make up more than half of the available inventory for sale.
Bank-owned Foreclosed Properties? Drive through virtually any Chicago Neighborhood - affluent, in the middle, or economically depressed - and you'll see at least a couple of boarded up homes on every block. These represent stark reminders that a true housing turnaround, with balanced for-sale and homes-sold inventory, may still be a long time off.
If you have ever been directly involved negotiating with a major bank on a short sale transaction, you know the time line has been, and continues to be, excruciatingly long. Disrespect is rampant - lender to borrower, lender to real estate professionals, and, eventually, the distressed seller, to everyone else involved.
Buying a foreclosed home? You know how arduous that process is well. Often times, Listing Agents who represent REO Properties are not responsive to your phone calls or emails. Presentations get delayed. In some cases, included personal property even gets removed for personal gain of the Listing Agents themselves.
Like a Las Vegas Table Game, the odds favor the "house." The house, in this case - the lenders.
Despite the fact they were instrumental in creating this mess with their "creative lending practices," they seem act as if they would just as soon pretend that resolving the problems they created, is not their problem!
Funny how major banks, who could often turn loan approval around in 10 days when the market was strong, and who would grant substantial credit line extensions to over-extended borrowers after a two-minute phone call, don't seem to want to come up with a system to help us get out of this mess!
YOU CANNOT TELL ME IT IS NOT POSSIBLE TO MOVE MORE QUICKLY!
This week, we have had one client who has waited nearly eight months for the Bank of America to respond to their short sale request. Eight months! We're on the second buyer, may go to a third. Yet, still we wait!
The reason, they say - They have a "major backlog" of short sale transactions awaiting approval. No staff to expedite them. Thousands more pour in each day! "Sorry . . . the delays just can't be helped," they imply.
But, hey - if all of these were new mortgage apps, when times were better - miraculously, they all got processed. Quickly! If they wouldn't have, the potential borrowers would have moved to another lender, who would have processed just as quickly.
Now, however - to much work, not enough hands!
We're working with another client, with four young children, including a newborn. Unable to sell their home, the borrowed against a credit card to pay their bills, including their mortgage payment. This, after heavy bank solicitation with those "teaser" checks to draw money from their credit account @ 1.9% for three months.
After the teaser period - the rate leaps exponentially - to 20.99%!
They are in trouble, but the solicitations for more credit keep coming! Near instant approval promised, enticing them to bury themselves even deeper!
With four young kids, the temptation is strong to keep themselves "solvent," but they are intelligent enough to know this is only a sham. They are sinking deeper and deeper into debt, with the "encouragement" of their lenders!
God-Fearing, religious people, these clients feel it is their moral obligations to live up to their financial responsibility. Paying late runs against their grain. They have asked their banks to help!
Their response - something like, "Come call us when you are really behind! You're still current! Why are you bothering us now?"
The old suggestion to contact your creditors BEFORE you get into trouble, but when you see trouble brewing? It doesn't really work! And, in some cases, it creates a flag on your file to watch your behavior with greater scrutiny!
Indeed, the truth can actually hurt you!
You buy a big-ticket item, like a major kitchen appliance, or a computer. Indeed, the purchase process, and approval for any financing, may take minutes.
But the service call on a problematic purchase - likely, days, perhaps longer! And at the sole convenience of the manufacturer!
It appears, here in 2010, the advertised promise of Forbearance is merely "face time." Good Public Relations. With no true intent to help behind it.
Frustrating for all involved!
You agree? Please share!
DEAN & DEAN'S TEAM CHICAGO
Comments(4)