I was struck by Gary's post earlier today about showing sensitivity and "compassion" for people who own homes and are behind in their mortgages. Many of them don't even know how they got there. You let one payment slide, and think you'll catch up next month. Then, your unemployment benefits run out or your child gets sick or your car needs repair.
Whatever the reason, people fall behind, and there is really no catching up. When they start to think of the home as an asset, and realize that the principal amount of the mortgage grealty exceeds the value of the home [that is probably something a sharp Realtor is suggesting], the impetus to catch up and throw more money at the Lender diminishes.
My practice as a Massachusetts real estate attorney is more and more dedicated to trying to help people in trouble. I have a concerned Realtor; I may even have a buyer who will purchase the home for its current value. I get an authorization from the Borrower to represent them with the Lender. I charge a relatively small fixed fee for my work. There will be no follow-up bills from me.
The Lender starts the process off on the wrong foot. After receiving the authorization, the Lender makes no attempt to contact me. When I contact the Lender, the first thing the employee of the Lender says is that it will take at least 48 hours to verify the authorization. Why so long? NO ANSWER. Could the Lender not suggest that the Borrower call and confirm the authorization? THAT IS NOT OUR PROCEDURE. Then change your procedure, These people are suffering.
When we finally start to speak of short sales and modifications, there is no real level of standardization. Each Lender, in fact each division of the same Lender, can have different approaches. Very few demonstrate much compassion for people down on their luck; that is standard.
I intend to keep trying for my clients. Once in a while I do find a human being who cares. Once in a while a short sale can be effected in 45 days. Not very often. The current system is skewed. There is no incentive for the Lender to be helpful. Whoever thought that $1,000 dollars, or even $2,000, would make the Lenders be cooperative was dreaming. If we are serious about pulling this crisis together, the government should subsidize the Lender fairly and perhaps even help the Borrower. The system as it stands now is stuck in a quagmire. Despite my best effrots, I cannot truly say that much progress is being made.
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