A family's path to foreclosure with no solution in sight but disaster

Real Estate Agent with Brokered by eXp Realty LLC SL # 3014652

waiting for the bad news

I keep telling myself.."This is the last post I'll write about short sales"... but I keep coming back to the same old story and that's disappointment.

I moved into this brand new neighborhood. I got to see the trees grow from twigs to full grown logs. The neighborhood was a nice friendly place for family values and there wasn't many homes for sale.

While we lived there I continued to learn about the nieghborhood and my knowledge grew to the point where today I've listed and sold quite a few homes there over that time.

I also do extensively farm the area with my bi-monthly market reports....keeping the neighborhood informed of our ever changing market. The information I supply is "free" and there is never an obligation if you call me with general questions and I even make appointments to give homeowners a consultation which is always free of charge. Sometimes people just call me to thank me for sending the information. They always tell me how nice it is to be able to keep the information and compare it to the previous one sent out. But I do receive many calls to come by and list their homes as well.

About a month ago I received a call from a homeowner who lives in the same neighborhood. There was the voice of a young girl on the other line asking me if I could help her parents out of a bind. The first thing I asked her was why she was calling me instead of her parents. You see they didn't speak much English and were of latin decent. She asked me if that would be a problem and of course I said not at all.

Their problem was that their home was on a course to foreclosure destruction and they wanted to know if I could list their home and sell it as a short sale.They were receiving my market reports for a long time and thought they could put their trust in me. It seems I've been getting more and more of these calls by the day and figured that one more wouldn't be a problem but I let them know that although I've been through this before.....there were no guarantees. They said that they weren't living in the property and would have to come in from Orlando and would be calling me the following week to set up an appointment. I never did hear back from them and then they called me last week and wanted to meet with me this past Saturday. They even asked me to email them all of the paperwork so they could read it and sign it and hand it to me at the house.

I wanted to ask a few preliminary questions just so I knew what I would be getting myself into.They told me they were already 4 payments behind which didn't help matters and that both loans were with the same bank. I guess you could say that was about the most positive news I could get. They also told me that they were already approved for a short sale with the bank and had sent in the banks short sale package. As they continued to giving me information I was seeking...it was looking more bleak but I still agreed to meet with them to see if there was any solution I could come up with.

We met Saturday afternoon at the home and they seemed to be a really nice family. The husband and wife and their three children and another relative....even though the parents didn't speak English and the kids were there to help....we were communicating and I knew they were fully aware of what I was going to tell them. I guess you could say I saw a sparkle in their eyes. But before I was past the first room of the home I was inspecting and noticed that just about the whole ceiling was covered with brown spot water stains and there was this big hole with exposed bathroom pipes. Even though I'm not a licensed contractor I knew exactly what the problem was. I previewed the rest of the home and most of it was in fair condition.

I was thinking..."How much worse could this get?" Well it did get pretty bad once we stood there and I started to explain what will most likely happen in a short sale situation. I also explained to them that even though they were approved by the bank for a short sale and even if we have a contract it still would be at least a minimum of 90 days or even more before we would know the outcome. I also let them know that this would not stop the foreclosure process unless they were able to get an extension which usually runs 45-60 days. I let them know that most likely they would be served by an attorney very shortly.

All of a sudden they tell me that they just got served and showed me the papers. I told them they had a few choices. They could hire an attorney to go to court and get an extension or try it themselves. They needed to pay an attorney to get them this extension and I gave an idea of what the costs could be.

But even far beyond that problem was that they told me that they were now 5 payments late. This wasn't making me feel any better. I let them know that they only had 15 days of the 20 days notice to answer the court and if they didn't they could kiss the home goodbye. I wanted to know why they waited to call me. They told me they had a tenant living in the premises and they were being really nasty about letting them try to get the home sold so they needed to get the tenant out first. I was also wondering about all the paperwork they sent the bank. Was it lost?... Did they ever receive it? Their answer was exactly what I told them happens a lot. They tried to mail it three times and then call the bank to confirm that theyv'e received it and each time were told that nothing was on file.

Finally after they tried three times to get confirmation.... they sent it out registered mail with proof of delivery and still were told that even though they had proof it was delivered...the bank didn't have it. I can't tell you how much time I spend just chasing the paperwork. I try to save time.

Time is the most important part of the short sale. If you run our of time then you might as well just pack your bags.This was making me really angry...but I can only go by what these people were telling me. There's always another side to the story but this sounded way too familiar to me.

Now I knew why they didn't contact me in April because if they did..maybe I had time to fix this problem.

Now my back was up against the wall...what could I do now? There was no time and even if they get the extension....60 days would be a long shot without even knowing if we'd get an offer in time. My last resort was to ask them if they tried to do a deed in lieu. They told me the bank would not approve one.They were told of this by an attorney in Orlando...but they could only afford to pay $30 dollars for a half hour consultation. Apparently I gave them more information than their legal consultation.

If only I knew earlier...maybe I could have helped.

My only other idea was a long shot. Have them go down to the courthouse tomorrow morning and ask for help. They wanted to try to file the extension themselves. I also told them they should call the bank up and speak to a supervisor and explain what happened to their paperwork and the time they lost.

I was pretty upset that I couldn't think of anything else we could do and told them to let me know what happens.

I'm not sure if they knew what the future would hold and I was really angry because in my opinion these people in lost mitigation that answer the phone are totally unqualified to give this type of advice to people. I'll bet you that most consumers don't realize that when they are looking for answers...they shouldn't rely on these people to give them information just to make them feel better and get them off the phone. The public is being misled with the advice they are receiving and these people should really think before they go ahead and assure someone that everything will be alright.

I hope there is a positive outcome with this family but I'm not too confident on this one...it might be too late......

**Update...the family had an executed contract and they were advised by someone to file bankruptsy so the sale never went through.

For more information please contact Neal The Real Deal Bloom-CRS-Realtor® /Remax Premier Assoc.

 Remax Real Estate Weston Florida Weston Realtor(R) Neal Bloom-copyright 2007

2500 Weston Road ,Suite 103

Weston FL 33331


Neal Bloom-CRS copyright 2008


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Tina Allen
Exit Realty Tri-County - Mount Dora, FL

Even though I am still a little new to this neck of the woods... I definately understand the frustration in dealing with some of these banks.  I have had sellers that I have been dealing with for the past few months and even though I feel horribly sad for their situation- I will be glad when this is over.. I have lost 2 buyers because of no cooperation from anyone sane in the "loss mitigation" department.  I am trying to stay away from any and all others like this. Good luck and I hope it works out for the best.

Aug 18, 2008 05:40 AM #55
Neal Bloom
Brokered by eXp Realty LLC - Weston, FL
Realtor CRS-Weston FL Real Estate


I just spoke to them...they called the courthouse but because we are in the middle of bad weather...the court house has closed for the day so I won't know anything else. I did tell them to call the bank and demand to talk to a supervisor. They did tell me their package was finally there..but I'm sure it will be lost again as this is a big problem.

Sale Pros,

That's what I was hoping for but even my attorney can't give me much to go on other than to go down and answer the extension to buy time.


Now I know it was because the tenants didn't want to let anyone show the property so they didn't even bother to list it until they got them out so now we are 5 months later. I would have suggested them to work it out with the tenant peacefully but I guess they took their own advice.


I know of one similar that an attorney found a loop hole in the documents that were never executed on part of it so they have a good case..not mine but one I know of from another person who I know.


It's bad enough to deal with these loss mitigation departments but when the guys in the mail room are losing paperwork...that's even worse of a problem that is causing time to really effect the whole process.

Michael R,

Face it...not everyone in the public really understands this process. They don't realize the foreclosure is totally a different thing that won't stop unless you go stop it.

Cheron L,

Thanks and I'm glad you read it as I hope others read it.


Of course not...that's the problem..no response...what in th world are these people thinking?


I'll need more than luck and that's why I'm only on the sidelines for now before I commit to unrealistic time line. I'll need 5-6 months to take this on.

Aug 18, 2008 06:00 AM #56
Thomas Hargreaves
TriStar Financial Services - Eugene, OR

Neal, have they looked at loan modification as opposed to a short sale?   I have seen loan modifications done even with 6-8 months past due.

Aug 18, 2008 06:25 AM #57
Neal Bloom
Brokered by eXp Realty LLC - Weston, FL
Realtor CRS-Weston FL Real Estate


Thank you for the suggestion but it was thought of until they told me the wife lost her job. They only have on salary coming in and can't afford it...they are to the point that they cannot carry it no matter what the payments would be...thanks

Aug 18, 2008 06:43 AM #58
John MacArthur
Century 21 Redwood - Washington, DC
Licensed Maryland/DC Realtor, Metro DC Homes

Neal - I do not hide from facts. I tell the people that ask for my help that they have to put them selves first. The primary goal is to be in affordable housing. The outcome of the "mortgage" crisis is secondary to the preservation of housing. I would have listened and told them....find a new home..NOW.....then we can deal with the possible sale of this property. By the time people reach such a delinquent status, the mortgage holder has exhibited all they are going to do to resolve the problem.

Aug 18, 2008 08:30 AM #59
Mike Norvell Sr
Morris Williams Realty - Leesburg, FL
Norvell Consulting Group

Hey Neal the Real Deal// Whats up...These deals are what drove me out of short sales...My record was in dealing with a couple who had played the system for 17 months...and still had no money to move...

These situation is hard to deal with..I remember when you said they got more info from you than they did the lawyer  for his fee...To bad they did not offer to pay you..Your time is valuable too...I agree with Lenn obviously...I would ask them how much they had put back to get another house...at this point theres not muchleft to do..Sorry Neal

Aug 18, 2008 08:59 AM #60
Neal Bloom
Brokered by eXp Realty LLC - Weston, FL
Realtor CRS-Weston FL Real Estate


Try to make sure you explain to your buyers that those deals are unknown whether or not they will make it through and if they don't have months to be patient then they need to find one that's not selling short.


Aug 18, 2008 09:27 AM #61
Neal Bloom
Brokered by eXp Realty LLC - Weston, FL
Realtor CRS-Weston FL Real Estate


They relocated out of the area and I guess they are renting now because they only have one salary. Whether or not that is true..they already have a place to live....there is a slight possibility from what they told me today that I might attempt to list is and see what transpires but they gave me some information today from the bank that I find hard to believe...let's see what happens.


Let's see what happens ...I gave them an idea as a last resort to try ...I might list it as per their request but with the notion there is no shot so I'm not worried..I'm going by some information the bank passed onto them but am not at liberty to discuss it yet.

Aug 18, 2008 09:32 AM #62
Diane Aurit
LKN Realty, LLC - Mooresville, NC
Lake Norman Real Estate

Neal, I haven't read all of the comments but as one who had not done any foreclosures but a few short sales I am wonderfing if they would qualify for a shor sale if they are not living in the home?  Would that depend on why they moved (ie because of a job)?  Well, no matter what it is very sad.  You are a pro at this.  I wish they had called you sooner.

Aug 18, 2008 09:44 AM #63
Neal Bloom
Brokered by eXp Realty LLC - Weston, FL
Realtor CRS-Weston FL Real Estate


That's true but I keep hearing banks are now allowing them....we shall see.

Aug 18, 2008 11:18 AM #64
Deb Brooks
Brooks Prime Properties Wichita Falls Texas - Wichita Falls, TX

Neal, I have been so lucky not to run into many problems such as these. My heart breaks for the family and the fact that you have to live with their pain! Here's a long shot of an idea. I have trained to become a loss mitigation specialist and have found that banks...or at least most of them will consider this.

If you contact the loan department and find the right person to visit with you might ask if they would consider this...instead of the costly nature of the foreclosure, if the people are still qualified after regaining a job or getting over illness or whatever the bank might consider placing the back payments at the end of their note. Our banks in Texas are doing this a lot. I was able to save one ladies home this spring and she was five payments behind. I don't know their situation but it is always worth a try.

Good luck to you and to them. I am sorry they are having so much trouble!

Later in the rain~Deb

Aug 18, 2008 11:44 AM #65
Neal Bloom
Brokered by eXp Realty LLC - Weston, FL
Realtor CRS-Weston FL Real Estate


It's ok but saving the home is not going to work...they had to move in order for the husband to work and his wife wasn't as fortunate but it's a good idea...thanks

Aug 18, 2008 11:51 AM #66
Seth Callen
Layered Artwork XChange - Oklahoma City, OK

Good example of a bad situation.  I've been involved in ugly short sales but not one that bad.

Aug 18, 2008 12:37 PM #67
David Thomas
HomeSmart Realty, Elite Group Scottsdale, Arizona - Gilbert, AZ

How sad - I too have found it impossible for banks to receive and account for paperwork.

Aug 18, 2008 02:00 PM #68
Elizabeth Cooper-Golden
Huntsville Alabama Real Estate, (@ Homes Realty Group) - Huntsville, AL
Huntsville AL MLS

Neal,  What a heart breaking story. I'm so thankful they found you, though it sounds as if they are up against a wall.  How sad.  I'll be so glad when all of these hardships are behind most of us. Lord knows how much longer all of this will go on? 

Hang in there, and give yourself a big pat on the back for guiding them as well as you have!  Your professionalism shows!

Aug 18, 2008 02:35 PM #69
Vickie Nagy
Coldwell Banker Residential Real Estate - Palm Springs, CA
Vickie Jean the Palm Springs Condo Queen

Jim, it's all too true that many families are suffering in this market downturn. I'm pleased to read how caring and helpful you have been in trying to assist this family in need.

Aug 18, 2008 03:25 PM #70
Gary Bolen
McCall Realty - South Lake Tahoe, CA
CRS - Lake Tahoe Real Estate Information

we just got a new REO today... and it is good for us, and a disaster for those who lost it. what a drag for them. hate it so... guy has lost more than 50% of his income... through no fault or lack of responsibility on his part at all.  It's the oil bidness, texas style, that did him in.

Aug 18, 2008 04:49 PM #71
Jason Secor
LivingInBirmingham.com - Vestavia Hills, AL
Birmingham Alabama Real Estate - Hoover Homes for Sale - Property MLS

Neal, I have an aquaintance here in Birmingham that it almost seems as though the bank wants to take the house. Its good to see people that care like you helping people.

Aug 18, 2008 07:03 PM #72
Neal Bloom
Brokered by eXp Realty LLC - Weston, FL
Realtor CRS-Weston FL Real Estate


I'm never surprised at what we go through in RE and there will always be another story that will top this.


We have to literally call once a week to make sure they still have it.


If there is a way out then I'll try to find it. If not then ...I'll just move on and they will have to as well.


Jim?...who is Jim?


REO's are much easier to deal with. I had one a few months ago and the process was much easier to get closed.


I could understand that there was a time when banks would want to hold inventory but now they usually sell them for less than the short would get. They really should look at those stats on how much money they lose and how much more if they foreclose. I guess they would rather keep losing money.

Aug 19, 2008 02:38 AM #73
Brian Belcher
RE/MAX Executive - Charlotte, NC
Charlotte Realtor

Great blog, what an example being set.

Aug 19, 2008 10:32 AM #74
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