The following letter was forwarded to me yesterday as it was to others of potential influence. I read it with interest because I believe that much of what the author vents is actually true. There are some things going on in the industry that I know are not appropriate and in some cases complete violations. Here it is:
Attention: President of Inland Valley Association of Realtors,
Dear Mr. Cusamano,
What is our leadership doing at the CAR and NAR level to keep our industry alive?
What is our leadership doing at the CAR and NAR and doing in Washington to get these financial institutions to start approving “Short Sales” instead of sit on them for 8 to 12 months and then without communication to the Realtor or Seller declining the application for “Short Sale” take them to Trustee Sales.
This is criminal to lead a Seller, Buyer, and Realtor along for months and without declining the request for “Short Sale” and then take the property to Trustee’s Sale in silence.
What is our leadership doing at the CAR and NAR and in Washington to get the foreclosure process running in natural order and get the financial institutions to release their foreclosed inventory and stop this nonsense of keeping foreclosed homes off of the market?
Currently it is nothing short of chaos: In the Inland Valley, I see ten or more qualified buyers fighting over one house.
Question: When will ten qualified buyers be able to go buy on a weekend again and a purchase a home?
The current system is broken and efficiency does not exist! When professional Realtors have to write ten offers to get one buyer a home, the system is broke and not functioning.
A Realtor cannot work every day, making offers every few days only to open one escrow in four months.
I have written 23 offers this year and only one REO offer was accepted.
All of these offers were realistic and over list price.
As a reminder, in a normal market, a buyer’s agent would likely make two to three offers and yield an acceptance/ pay check.
By this time of the year, after having written 23 offers, I would normally have 8-10 escrows and would not be writing this letter.
So I ask, what is our leadership doing at the CAR and NAR level to keep our industry alive?
Inside trader issues loom into the murky waters of REO Listing agent offices. Another situation that annoys buyers and their agents, REO Listing agents are placing their “For Sale” signs up several weeks before the properties are loaded into the MLS. This is a violation of MLS Rules throughout the State of California.
Has the new “Golden Rule’ become: “Those that have the gold make the rules”.
Should CAR local Associations be concerned with the unlevel playing field that REO Listing agents yield by being able to market the home weeks in advance of the home being placed in the MLS?
This is a violation of MLS Rules throughout the State of California.
I think the real problem is that the Financial Institutions are not foreclosing in a typical timely manner and the homes they have foreclosed upon are systematically being withheld from the market place. Another historical marker in an unprecedented tome in U.S. history.
My suspicion regarding “Short Sales” is that agents accept your offer and then later procure their own buyer and tell you months down the road that the seller/bank went with another better offer, another dead end toward trying to close an escrow.
“Short Sale” procedures should be reviewed and more detailed procedures need to be made part of MLS Rules and/or CAR rules. This will happen naturally through the legal system as Seller’s, Buyer’s and Realtor’s will all be suing each other due to the lack of currently defined detailed procedures.
Banks are deliberately holding back from approving “shorts sales”. This is criminal.
It is simply criminal that every loan servicer sends delinquent home owners a letter offer solutions to their delinquency problem. The first solution on most of the letters is to contact your local Realtor and list the property for sale.
From a processing standpoint in the “loan mitigation departments”, there is no reason for a “Short Sale” to go over six months.
What is the hidden agenda in with the financial institutions?
Are they “cooking their books” overstating the asset value of these homes?
Why don’t they just end the misery and foreclose?
Holding Realtors, Buyers, and Sellers hostage for months and months, not making a decision on a “Short Sale” application, then foreclosing without declining the “short sale” request is criminal.
I know that financial institutions have hundreds of homes in the Inland Empire, probably 1000’s that I don’t know about that they just are not putting up for sale.
How can we hit the bottom of the market when the natural order of “supply and demand” is artificially being stymied?
Sincerely,
Scott Chappell

Again, I thought this was interesting as I hear similar tales from buyers who come to my classes.
The fact that we are keeping people in their homes who have no way of paying for them is wrong. I am a consumer advocate and I teach and fight for homeowners, but we still need to be fair. Forcing others to pay for your mistakes and ask the tax payers to bail you out is not appropriate. Of course I am only talking about those who overspent and not those who are victims of circumstances beyond their ability or control. If you cannot afford to keep the home that you purchased, why is the government doing everything they can to delay the inevitable? By continuing to print money and offer more and more solutions to lenders and buyers who made poor decisions, is illiminating the need for the private sector to make tough decisions. Why should a lender/servicer cooperate with the normal way of business? Debt forgivness, needs to be for only those who truly have a unforseen hardship. If this means banks fail, so be it. The banks who practiced sound judgment would be rewarded with greater market share. It’s supposed to work that way. If we have to go through a very tough economic time, then let’s get it started and get it over with. This is like a slow and painful pulling off of a bandage. Not only does it hurt, its makeing things worse overall. If we have become a Nation of individuals who refuse to take responsibility for our actions, we are doomed. Our Grandchildren should not have to pay for our mistakes.
One mans opinion! I’m sure I could debate this issue for hours with other passionate people and all of us will have valid points. In the end, there is no silver bullet. It just seems like we are trying to discover the lowest common denominator and making this the new standard. Whats the incentive to do what is right if your punished and those who did wrong are rewarded?
Chris

Chris Miscellaneous

Hello Chris, I want to thank you for your time and effort in this program. My question is regarding our 2nd mortgage. My husband and I funded our loan with Standard Pacific Mortgage (the builder). We were told that we had to have a 1st and 2nd mortgage because of the price $565,000.  Both loans were later sold, the 1st is with Countrywide and 2nd with Wells Fargo. Due to unforeseen circumstances (loss in wages) and having an adjustable rate mortgage we are probably going to lose our house in foreclosure. We have never refinanced and are upside down approximately $200,000. Countrywide is not working with us on a modification. In your seminar you had mentioned that we could be held responsible for our 2nd mortgage if it is an equity line of credit, which is what Wells Fargo is calling our loan. However we never signed for an equity line of credit (because we never had  equity in the house).  So are we responsible for the 2nd mortgage ???  Can you explain this in more detail please. Thank You

Boise Miscellaneous

I just responded to a frustrated buyer who signed an agreement back in February called; Buyer Representation Agreement-Exclusive.
The parties don’t click! Regardless of the two sides to the story, I felt my response may be helpful and that is why I am posting it here.
Many Buyer Agreements presented to buyers are fairly easy to rescind. Not the Exlusive one. Known as the BRE contract authored by CAR (California Association of Realtors), this is the mac daddy of all buyer contracts! In other words, be sure personalities and expectations are set properly between you and your Agent prior to signing it. Getting out of it if you find you don’t like your Agent is not an easy task if the Broker is not feeling generous!
Here is what I told the buyer who wrote to me:
Based on reading the entire e-mail thread, it appears that there has most definitely been a breakdown in communication. Obviously, I was not a party to the conversations, but they bring up some points that perhaps you could address.
What I would do is to write a short and polite request to the Broker to release you from the contract and attach the e-mail thread. The contract is between you and the Broker, who is represented by the Agent. Therefore, even though it sounds like they are a husband and wife team, you are correct when you mention that he is not involved. Albeit emotionally, it is his wife and of course very involved.

I hope this helps. Please let me know the outcome of the request. The BRE form is a very effective tool to get a buyer to commit to working with one Agent instead of many. From the Agents perspective, it is hard to argue against such a contract due to many buyers feeling no sense of obligation towards the time that it takes to perform their duties. From a buyers perspective, it is difficult to imagine a more frustrating experience than to be obligated to work with someone that you have no desire to work with.

Your assertion that you would be more careful to match up personalities prior to signing is probably a good one. If I were in the position of the Agent I might have a strong heart to heart with you and confirm expectations upfront. This does not guarantee a successful relationship but it helps. I can share with you that many buyers are frustrated right now because they keep hearing what a buyers market it is, yet they cannot get a home without having to overbid by large amounts. My opinion is that there will be more inventory coming and to be a little patient. If time is working against you know that if you intend to hold the property for five years or longer, I do not believe you will be over paying for a home in this market. The values are in fact down by 50% in most markets and that is an “over correction” by most experts opinions. Even if they go down further, when they do bottom, there will be an immediate and quick jump up in prices due to how low they have come down.

Please write to the Broker and obtain a legal release and then let me know her response.

Chris Miscellaneous

*Posted with permission*
I have been receiving a lot of information about loan modifications. My home has lost about $100,000 in value since I purchased it in 2005. I currently have an adjustable rate loan that is being held at a fixed for 2 more years. My intention when I purchased my home was to re-fi in 2 years. However, that is not feasible. I would like to know if I qualify for a loan modification and what reputable companies can I contact?

Chris Miscellaneous

We are currently trying to get help with our mortgage company Countrywide for a loan modification. We are current with everything right now, home loans and credit cards. We have been struggling for the past several months and have called Countrywide on several occassions to have them say “Call back in a week or two, we can’t help you now.” My husbands hours have been cut and my income of being self employed in the sales business has been drastically hit. We have depleated of our sources just to make our payments and we can’t continue to do so any longer, we have run out of funds. We currently owe $260,000 on our First and $39,000 on our second. I found out that our current property value is $127,000. Countrywide will not refinance because we are more than 105% in the negative. We were told we could maybe do a loan modification. When I talked to Countrywide they say that we have to be more than 60 days late to qualify. On the Making Home Affordable website it states that you don’t have to be behind on payments. Countrywide says that is not true. My question is who is correct regarding this matter? My other question is regarding our home equity line of credit with Wells Fargo of the $39,000. We have made all of our payments, never being late. We have not contacted them regarding any modification, but they are calling us all the time wanting us to see if we qualify for a modification. They want to run our credit and check out all of our debt to income. Can you modify both your First and Second or only one? Should I just work on trying to modify my first at this time and deal with the second at a later time? My interest only payment with Wells Fargo is only $150.00 a month. Thank you so much for any information you can give me. Things are very confusing when it comes to this matter. They need to make things a little clearer. Thanks

Chris Miscellaneous

We are many payments behind on our loan. The bank, Wells Fargo, is offering us “a plan” so we can become current on our loan. They are asking us to make three consecutive payments of $2,107 (approx. what were paying before we stopped making payments) and on the fourth payment, HUD will pay for most of what is past due (approx. $30,000). The bank rep recently told me that because we have a “bonded loan” they cannot offer us any modification to help us reduce our monthly payments. How true is this? Where can I read more about “bonded loans?” We are not sure if we should take the plan because ultimately they are not offering to help us reduce the monthly payments, they are only helping us in making our loan current. We stopped making payments when my husband lost his job. He has not been able to find another job. I’m the only one working at this time.

yanira_ortiz Miscellaneous

Have agreed to be more agressive in their policy towards short sales. They are no longer looking for the same investment in the payoff on seconds which will have a positive impact on this desperately needed area of the market.
Logic does not always prevail in this crisis and lowering or adjusting the banks expectations towards second liens is a step in the right, logical direction.
My prediction is that you will see more of this as modifications fail and short sales become more prevalent.

Chris Miscellaneous

Hello Mr. Sorensen,

I enjoyed your presentation today at UCR. I found it to be very
informative. With the recent drop in house prices and the Home Buyer
Tax Credit program, my wife and I are starting to look into the
possibility of buying a house. At this point we’re just trying to get
a general idea of what we need to do and what we can expect in this
process. To help you answer our questions, here is a quick rundown of
our situation.

We were just recently married (Oct 08) and have been focused on paying
off our bills from the wedding. As a result, we haven’t been saving
for a house (I did however, put aside $3k last week). We do have plans
of moving to the east coast (we’re both from NH) in the next 3-5
years. If the economy were in better shape, we would probably move
sooner (the idea of moving and looking for a new job with the current
state of our economy scares me). Since it seems that we will be here
for a while, we were wondering if we’d be better off putting our money
towards a house instead of continuing to rent ($1500 per month).

Here are a couple of questions to get us started:
1. If we are thinking of moving to the east coast in the next 3-5 yrs,
does it make sense for us to look into buying a house?
2. You mentioned that it is harder to get the Home Buyer Tax Credit
than it appears. Can you explain this?
3. We both have a credit score in the neighborhood of 720. What should
we expect for an interest rate (aprox)?
4. We are working on coming up with a down payment for a house. As
stated above, last month we put aside $3k. I have plans to put aside
$2k per month until we have $9k, which should be a big enough down
payment on the houses we are interested in. This would mean that we’ll
have the money around July 1st. Is it a bad idea for us to do
something like take out a personal loan to try and come up with the
down payment sooner, so that we can start the approval process?

Thanks for you time. I look forward to speaking with you soon,

Chris Miscellaneous

I know you are hurting, I realize you are frustrated, but know this, at this point in time only about 30% of the modification request are going through and less than 10% receive a principle reduction! Stop paying big money in the hopes of getting something that you’re highly unlikely to get!!! You’re getting ripped off far too often and it’s breaking my heart. You want so bad to believe this lousy sales person who promises you a great rate and a principle reduction that you fork over 2, 3, 4 of 5 thousand dollars and I could have told you very quickly what your chances were. In most cases, very low. If you qualified for your home using a stated income loan you are not likely to get a modification unless your actual income proves that you can afford to stay in your home. If you do not have stable, verifiable income, you’re not likely to get a modification. If you want a principle reduction or a modification simply because your neighbor got one, thats most likely not going to work. Is it fair, no. My advice, VOTE.
Also, just because someone wants to charge you money for a service does not make them bad. However, there are strict rules governing the negotiations on a mortgage instrument. Know the law and know what to expect. Come to our class or ask me where you could go to get qualified professional help for a modification, or to find out if you even should request one. Non-profits are reccomended most. They are dedicated, hardworking and their heart is in the right place. Attorney’s, Brokers, CPA’s and a few others are leagal with caveats and conditions that are too many to list here. Of all of them, an attorney, who specializes in these negotiations themsleves and do not lend their license out to a bunch of idiots who are no longer making it in the loan business, is probably the best. Suffice to say, far too many are ripping you off. Either with intent or because they are incompetent. Either way, your money will be gone and it will be very difficult if not impossible to get it back.
We’re here for you. Ask us and we will do our best to guide you. It may not always be easy to hear, but it will be factual. Sorry for the rant, but I hear far too many horror stories not to get upset.

Chris Miscellaneous

*Posted with permission*
My mortgage company, Indymac Bank paid my home taxes for the pass two years I have the harm plan the three option payment what happen with this was on November 2008 I received a letter from Indymac Bank stating due to them paying my home taxes my monthly payment will be going up on on December 2008, I was paying for the passed two years the minimum payment of $830.00 and sometimes the interest only, maybe three times fully amortized payment that was fine and comfortable payment but after December 2009 my payment went up to $2,200.00 each month. I went for help to a company called First Premier Capital located in Glendale, California to assist me on a modification program with my mortgage company, the application was place in December 2008 and every time I called them they say Indymac Bank has not assign a loan representative to my case and now I’m receiving letters from Indymac bank collections company stating if I dont pay my back due debt they will for sale my home on May 9, 2009. please advice, thank you! A. I have a job for the passsed 22 years and still working. I had hardship in the year 2007 & 2008 and now with this high morgage payment I’m not able to pay my other responsibility cause my mortgage company is taking a big lumps sum.

Chris Miscellaneous