Maybe I should have been a Loan Servicer

In Property Management, for the most part, when tenants don't pay the Property Manager does not collect the percentage of rent. Fire alarms go off, phone calls are made and Property Managers get proactive in working with tenants for a win-win solution. The actual landlords start calling the property manager non-stop and the Property Manager starts calling the tenants to find out what is going on.

The Property Manager tries to work something out and tries to find out what is going on. A REALLY good Property Manager will come up with a solution REALLY fast. This could range from a workable solution with a tenant in making payments to getting on the phone and starting the eviction process pronto before a non-paying tenant drags everything out for as long as they can.

For the most part...the Property Manager becomes Super Proactive in a Win-Win Solution

So why should Loan Servicers get paid when homeowners don't pay their mortgage? Do you think that if they did not get paid that loan servicers would be more Proactive to reach out to homeowners instead of just calling them with annoying phone calls like your typical debt collector? Do you think they would reach out and try to HELP the homeowner come to a workable solution to move on AS SOON AS POSSIBLE?

That would certainly make financial sense to the actual owners of the loan or what is also known as a Mortgage Backed Security.

But in the Big game of the Loan Servicing Business, that's not how it works. It CERTAINLY does not work that way if the loan is owned by Fannie Mae or Freddie Mac and being serviced by Big Name Loan Servicer. (Experienced short sale agents certainly know what I'm suggesting here.)

Most homeowners are under the impression that just because their payments are going to Bank of Earth that Bank of Earth owns their home loan. That's not always the case and Bank of Earth could just be the Loan Servicer that collects payments and disburses proceeds to investors that actually own the loan.

So what happens if the homeowner stops making their Mortgage payments?

Well... in the case of loan servicers that are handling loans that are owned by entities that are U.S. Taxpayer Backed, It seems to be CHA-CHING time!

Fannie Mae Needs Another $8.5 Billion of U.S. Taxpayer Dollars. ($100 Billion of U.S. Taxpayer Dollars have now gone to the contribution of incompetence.)

With the Loan Servicing Fees listed below -- ya think there is a little conflict of interest when it comes to doing what's right? Don't ask me how I got the following information. (It's really not that hard to get... I just want to sound super stealthy cool.)  Real Estate Agents handling short sales are swimming against a rip-tide which should help explain to you why Short Sales have really not gotten Too much better then they were three years ago all things considering. U.S. Taxpayers should be outraged because it's your money going to this.

From Bank of Earth:

Trustee Fees = $1,900
Lawn cut = $125
Advertise / Publish Foreclosure = $4,000
Abstract Fee = $1,200
Mailing Fee = $580
Posting Fee = $290
Postponement Fee = $3,500
BPO = $125
CASH FOR KEYS = $3,000
Lock Change = $325
Winterization = $1,500

There is more ... just thought I'd mention some common payoffs that many people may have experience with. Cash for keys? Anybody out there who got $3,000 in Cash to turn in the keys? Most I've heard of is $1,800.

For you BPO experts out there... how do you feel getting paid $45? Do you feel Cheap? You should...

Lock Change for $325? Are you kidding me with those cheap locks that are put on the property? 

Meanwhile... the housing market gets to drag in mud ... four years after the foreclosure fiasco started and there is no end in sight. And why should Loan Servicers really care when they are charging up these fees to the actual owners of the loans?

Could this be the REAL reason you can't get a Short Sale Approval / Answer on what should be Slam Dunk Cases? You know... homeowners that have no job, no income and no assets but the new buyer is paying CASH at or above market value? Cases like this take months and months to make a decision on? I don't think So...

Conflict of Interest?

Ahhh... But If I was Only a Loan Servicer!

Ahh... what I could do to Puppy Dog Real Estate agents with dreams of a commission check to make them beg and dance around for a milk bone.

I can see it now...

Yes... (sure thing).... I am working on that short sale paperwork. Oops... I just got to it and the dates of the death certificate are old. Please submit a death certificate with a more current date within 30 days old. (So I can charge the investors that actually own the loan even more. CHA-CHING!)

The buyer canceled because they did not get an answer within four months? Oh... I'm so sorry.... Let's start all over when you get a new buyer and submit all of that paperwork again on our brand new online system where YOU become our file processor (for Free!). It's a great system and we save so much money not having to pay somebody to file all of that pesky paperwork that is required. Follow the instructions provided in this guideline for the best chance of having that short sale approved in a timely manner. (Wink, Wink.)

Oops... so sorry. I'm so sorry your third buyer canceled because it took me over four months to make a decision.... (again).. I have to send it to my foreclosure department. Too Bad... So Sad. (CHA-CHING!!)

Get what's going on yet?

What do you think about the fees listed above? A little inflated? What do you think about paying these fees that do not help solve the problem and in fact...

Hinder Progress?

This is all Old News.... what's really sad is how long it's been allowed to continue. It's sad that it's not being brought to light more often to help Americans move on in life in a quick manner so we can have a true recovery instead of dragging in mud.

And many people say Water Boarding is torture. 

With what I'm going through with Wells Fargo on a Fannie Mae owned loan where the home owners are current on their loan but had to relocate across the country and need to do a short sale.... I'd rather be Water Boarded for a short sale approval then what I've gone through so far.

Think about all of the fees mentioned above and for you short sale experts out there... think about those Fannie Mae and Freddie Mac owned short sales you've worked and compare them to the Portfolio loans.

How many short sales have you had that were Fannie Mae owned that Bank of Earth serviced the home to foreclosure, turned around, and put the home back on the market as a REO property that Sold FOR LESS then what Fannie Mae would have received if the short sale would have been approved?

I'm not proud... I've had three of them in the past three years. Three of them where the U.S. Taxpayer paid for the difference of what I could have gotten them and what they actually received.

Did I mention that Fannie Mae needs another $8.5 Billion Dollars of Taxpayer funds so they can keep getting fleeced? Maybe putting it in real numbers is more eye catching such as $8,500,000,0000. (Do you have any idea what that looks like in ACTUAL $100 Bills?

Not too long ago, I watched some CEO of a Loan Servicing company on CNBC state that investors should be investing in his company because they don't actually Own the loans they are servicing and they are not losing money.

Well over a year ago... there was a blog article that highlighted the fees that Loan Servicers collected... Loan Servicers Can Make More Money on Foreclosures then Approving Short Sales?

If Loan Servicers were not making money off of homeowners that could no longer afford their inflated mortgages on homes that had inflated values that they purchased with No Income, No Job and No Asset documentation, would Short Sales take so long for a decision to be made when all of the proper paperwork / documentation is submitted?

(Industry Average.... we've all had our instant answer super short sale approvals so don't even comment on your one or two deals that had a short sale approval within one month and make it sound like that's your average.)

So where is the NAR on all of this? Have the Loan Servicers such as Bank of Earth payed them off too?

What do you think?

Paul Francis
Prudential Americana Group
Las Vegas Real Estate
702.592.3058