Last week, mortgage industry representatives made an interesting admission to lawmakers:
Mortgage modifications aren’t doing the trick.
According to Tom Deutsch, Deputy Executive Director with the American Securitization Forum: “While critically important and increasingly employed, industry-led loss mitigation initiatives, including loan modifications, are not a panacea for declining home prices, mortgage defaults and foreclosures.”
Just like yesterday’s discussion of the massive changes to the $700 Billion Bailout Plan, this has direct ramifications for real estate investors. Please read onward…
I’m not a mortgage industry insider. I don’t know whether Mr. Deutsch’s statement is fact or a convenient creation of stubborn mortgage lenders. Either seems possible.
Nevertheless, some reasonably plausible explanations exist for the stated weakness of mortgage modifications as a foreclosure avoidance tool:
- According to Michael Gross, Bank of America’s managing director for loan administration loss mitigation, a lender doesn’t necessarily have the authority to modify every loan, since many loans are subject to contractual obligations with underlying investors (Bryan’s Interpretation: I suspect this is, in part, a coded way of saying that to modify a mortgage may inhibit the lender’s ability to profitably pay out on their deposit account obligations such as CD’s and savings accounts)
- Many home owners have multiple mortgages, and there’s no way for one mortgage holder to force the other mortgage holders to simultaneously modify their terms. (Bryan’s Interpretation: If Lender A and Lender B both have a mortgage against a property, there’s no way either of them are going to agree to take a loss unless the other lender takes a loss too.)
- Resistant borrowers who are in over their heads and just don’t care anymore are refusing to seek or accept mortgage modifications.
I think the real reason the mortgage industry is making a play to convince lawmakers that mortgage modifications aren’t working is in the hope that the government will offer further direct financial aid to the mortgage lenders. After all, the mortgage companies succeeded in convincing our Very Stupid Congress that the entire world would fall apart without government intervention, so why not try the same thing again.
As it turns out, a Very Stupid Congressman, Democrat Barney Frank of Massachusetts, was very quick to demonstrate his lack of ability to creatively think when he said: “I believe we now have a situation that requires legislation.”
Really, Barney? Have you ever met a problem that didn’t require legislation? Remember, Barney ole pal, you were instrumental in creating this subprime crisis (along with your buddy Democrat Senator Chris Dodd from Connecticut) when you legislatively paved the way for the subprime crisis and refused to do anything constructive to resolve it. But I digress…
Forgive the brief rant. It still galls me that there is overwhelming proof that Frank and Dodd were among the primary architects of this mess, yet they still have the nerve - and the full support of their party - in speaking out about it. Yet again, I digress…
Here’s the connection to real estate investors: Just like yesterday’s analysis of changes to the $700 Billion Bailout plan, the news that lenders don’t want to grant mortgage modifications will probably further pave the way for more short sales since short sales are actually a final solution for lenders rather than a temporary “stop the bleeding” type of action, and therefore probably (though not certainly) a preferred way to deal with the problem of defaulted mortgages.
One way or the other, I’m convinced that short sales are going to become a tool of supreme importance during the next 12-24 months.
That’s why I’m placing extremely high importance on finding some good short sale training to provide to you. I’m not a short sale expert, so I’ll seek out a bona fide expert on the topic and share them with you via free teleseminar and/or webinar as quickly as possible.
Do you have a preferred short sale expert from whom you’d like to hear? If so, sound off below. And also, tell us about your experience with mortgage modifications in recent months so we all know what is really happening in the real world of mortgages.
Thank you for reading RealEstate.BryanEllis.com!
*** BIG NEWS: Bryan will host the nation’s leading expert and educator on Short Sale Investing in a private FREE webinar on Tuesday, November 25. Click here to register (no cost).
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15 Comments So Far»
Hi Bryan, your rant was justified by the actions of congress to cause the problem, then want to take more taxpayer money to throw at the problem. About short sales… last year, once I realized we were going into a new cycle and my sub to and lease option strategies were not working as well, and my money and savings were disappearing, I started looking for a solution. After examining all the different options, I decided to try short sales for a necessary infusion of cash. I started on one, it being my first, with only two basic sources of information. One was a booklet from Lou Brown, which was just basically all the documentation, and how to set it up. Then next was from audio clips of Dwan Bent Twyford discussing short sales. I began the process, made the calls, sent in the documentation, and made 45,000 on the first deal, although it took 3 months to get it closed. My new philosophy is stack em deep. I have closed 3 so far, and have 15 pending. The one I close this week will get me 25,000. Short sales have saved my butt. My daughter, (24 years old) who recently divorced and moved back in with me, started learning short sales, and is now closing on her first, and will have no need for her full time job making 8.50 per hour any longer.
** According to Michael Gross, Bank of America’s managing director for loan administration loss mitigation, a lender doesn’t necessarily have the authority to modify every loan, since many loans are subject to contractual obligations with underlying investorsj. (Bryan’s Interpretation: I suspect this is, in part, a coded way of saying that to modify a mortgage may inhibit the lender’s ability to profitably pay out on their deposit account obligations such as CD’s and savings accounts) **
Mr. Gross is correct. One need only read Fannie Mae’s “Servicing Guide” to know this is true.
http://tinyurl.com/3sdr3
(How does the extreme degree to which it’s difficult for legitimate visitors to read the Captcha words assist in thwarting spam?)
Here are some, but not all, of the pertinent sections.
Home
Fannie Mae Single Family
2006 Servicing Guide
Part VII: Delinquent Mortgages
VII, Chapter 5: Loss Mitigation Alternatives (01/31/03)
VII, 504: Preforeclosure Sales (01/31/03)
Up One Level
VII, 504: Preforeclosure Sales (01/31/03)
VII, 504.01: Identifying Potential Candidates (01/31/03)
VII, 504.02: Contacting Selected Borrowers (09/30/06)
VII, 504.03: Determining Market Value of Property (01/31/03)
VII, 504.04: Discussing Sale With MI (01/31/03)
VII, 504.05: Requesting Fannie Mae’s Approval (01/31/03)
VII, 504.06: Special Financing Arrangements (01/31/03)
VII, 504.07: Mortgage Insurance Claims (01/31/03)
VII, 504.08: Accounting and Reporting (01/31/03)
VII, 504: Preforeclosure Sales (01/31/03)
Occasionally, none of the servicer’s efforts to prevent or cure the delinquency will be successful and the use of relief provisions may not have been feasible or productive. When all measures short of foreclosure have been exhausted for a conventional mortgage, the servicer should consider the use of a preforeclosure sale procedure. Under this procedure, when the borrower cannot sell his or her property for the full amount of our indebtedness, we will consider accepting a payoff of less than the total amount owed on the mortgage if that will enable us to reduce the loss we would incur if we foreclosed and acquired the property. (We also will agree to preforeclosure sales for FHA, VA, or RHS mortgages if they comply with all of the insurer’s or guarantor’s guidelines and do not result in a loss to us.)
A servicer may pursue a preforeclosure sale at any time prior to the actual foreclosure sale if acquisition of the property is the only alternative to the preforeclosure sale and the proceeds from the sale, along with any MI settlement, would make us whole—or, at least, would result in a loss that would be less than any loss we would incur if we had to acquire and dispose of the property. As long as the proceeds from the transaction make us whole, a servicer may negotiate and complete the preforeclosure sale without our involvement. However, a servicer must obtain our prior approval of any preforeclosure sale that will result in a loss to Fannie Mae.
While pursuing a preforeclosure sale, the servicer will still be expected to follow our requirements related to the initiation of foreclosure proceedings for defaulted mortgages. The servicer must not delay the initiation or continuation of foreclosure proceedings unless it receives prior approval to do so from both Fannie Mae and the MI.
To offset a servicer’s expenses for handling a preforeclosure sale for a conventional mortgage, we will pay the servicer a processing fee of $1,000 as soon as we receive verification of the completed sale.
VII, 504.01: Identifying Potential Candidates (01/31/03)
When analyzing mortgage delinquencies, the servicer should identify those borrowers who are experiencing a financial hardship that prevents them from making their mortgage payments and who can be expected to have difficulty in selling their homes because the current value is probably less than the amount owed on the mortgage. The borrower’s financial hardship must be the result of an involuntary reduction in income or an unavoidable increase in his or her expenditures—such as a long-term job layoff; a job loss; a mandatory pay reduction; a disability or illness that results in a decrease in income or in major medical expenses; the death of the principal wage earner; or a decline in a self-employed borrower’s earnings. However, a borrower will not be eligible for a preforeclosure sale if his or her financial hardship results from circumstances that he or she can control or plan ahead for—such as experiencing a normal seasonal layoff, voluntarily quitting a job or reducing the number of hours worked, or reducing (or eliminating) income as a result of returning to school.
VII, 504.02: Contacting Selected Borrowers (09/30/06)
The servicer should contact each borrower that it has identified as a potential candidate for a preforeclosure sale before he or she fails to pay three consecutive payments to discuss all of the foreclosure prevention opportunities that are available—special forbearance plans, delinquency repayment plans, modification of the mortgage, selling the property as a mortgage assumption, etc. The servicer should exhaust all other available means before it discusses a preforeclosure sale with the borrower. At that time, the servicer may describe how the preforeclosure sale process works, making sure that the borrower understands both the benefits and drawbacks of agreeing to a preforeclosure sale. If the foreclosure process has already begun, the servicer should advise the borrower that the foreclosure proceedings will continue even if the property is listed for sale, but that the terms of the preforeclosure sale agreement will be honored as long as the property is sold before the foreclosure sale date. If the foreclosure process has not begun, the servicer should make sure that the borrower understands that listing the property for sale will not delay the initiation of foreclosure proceedings.
The servicer should inform the borrower that, if the sales proceeds are not sufficient to satisfy the mortgage debt, the mortgage holder may require him or her to contribute funds to reduce its loss. (For example, if there are unused funds in the borrower’s escrow account, we will require the borrower to waive his or her rights to the funds so that they can be applied toward the indebtedness.) As an alternative, we may agree to permitting the borrower to execute a promissory note for the amount of his or her expected contribution. The servicer should advise the borrower that there may be possible tax consequences if any portion of the outstanding debt is “forgiven” and refer the borrower to IRS Publication 544, Sales and Other Dispositions of Assets, particularly the section captioned “Foreclosure, Repossession, or Abandonment.”
Sometimes a borrower may be reluctant to list his or her property for an amount that is less than that required to satisfy the entire debt unless the servicer provides written assurance that the short payoff will be accepted. When this happens, the servicer should request our prior approval of the preforeclosure sale before the property is listed. If we approve the sale (subject to receipt of a specific price), the servicer can add the requested assurance as an addendum to the listing agreement.
The servicer should explain to the borrower that he or she is expected to execute all of the documents that are necessary to sell the property—listing agreement, purchase/sales contract, closing documents, etc.—even though the documents will indicate that the sales proceeds should be paid to the mortgage holder. The servicer also should advise the borrower that he or she will remain responsible for maintenance of the property until it is sold and the settlement has occurred.
The servicer should inform the borrower that all sales contracts that will not fully satisfy the outstanding debt must include a contingency clause making the sale of the property “contingent on the mortgage holder’s and the mortgage insurer’s (if applicable) agreement to the sale.” The servicer also should advise the borrower that the following specific cancellation clauses must be included in the listing agreement and sales contract:
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Listing Agreement: “Seller may cancel this agreement prior to the ending date of the listing period without advance notice to the broker, and without payment of a commission or any other consideration, if the property is conveyed to the mortgage insurer or the mortgage holder.”
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Sales Contract: “The seller’s obligation to perform on this contact is subject to the rights of the mortgage insurer (if any) and the mortgage holder relating to the conveyance of the property.”
If the borrower is agreeable to a preforeclosure sale and the property is listed with a real estate broker, the servicer should ask the borrower to provide the broker’s name, address, and telephone number so the servicer can contact the broker to explain the requirements related to the preforeclosure sale. If the property has not been listed for sale, the servicer may recommend a specific real estate broker to handle the listing, as long as it makes sure that the borrower understands that he or she may select a different broker.
The servicer should request that the borrower submit a letter requesting consideration for a preforeclosure sale and providing information that will document his or her financial hardship (including the servicer’s customized financial form or Fannie Mae’s Borrower’s Financial Statement (Form 1020 or 1020(S)), the borrower’s most recent paystub or, if the borrower is self-employed, copies of his or her federal income tax returns for the past two years).
VII, 504.03: Determining Market Value of Property (01/31/03)
The servicer must obtain an appraisal for the property (with both an interior and an exterior inspection) to assist it in evaluating the merits of a preforeclosure sale. Occasionally, we may instruct the servicer to obtain more than one appraisal.
VII, 504.04: Discussing Sale With MI (01/31/03)
Once the servicer has obtained the appraisal, it should contact the MI (if the mortgage is insured) to discuss the possibility of pursuing a preforeclosure sale. In discussing the possibility of a preforeclosure sale with an MI, the servicer should keep in mind the conditions under which we will accept a preforeclosure sale. The servicer must not agree to a preforeclosure sale unless the MI agrees in writing
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to waive its property acquisition rights before the claim is filed, and
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to settle the claim by paying the lesser of the full percentage option under the terms of the master policy or the amount required to make us whole. (Our “make whole” amount is the sum of the outstanding principal balance, interest accrued at the note rate from the last paid installment date through the expected loan closing date, and miscellaneous expenses, less any cash contributions from the borrower or the property purchaser.)
If the MI refuses to consider a preforeclosure sale or offers to settle the claim for an amount that is less than the percentage option or our “make whole” amount, the servicer should advise its lead Fannie Mae regional office.
VII, 504.05: Requesting Fannie Mae’s Approval (01/31/03)
Since the decision to accept a purchase offer that will involve a loss to us should generally be made within 24 hours of the offer, the servicer needs to provide us with as much information as possible to enable us to perform the analyses we need to make. Therefore, as soon as a purchase offer is received, the servicer should transmit a description of the borrower’s financial circumstances, a property market value analysis (based on the appraisal), the specifics about the purchase offer, and the servicer’s recommendation to us through the Home Saver Solutions Network. At the same time, the servicer should send this information and any required documentation to the MI by overnight mail delivery (whenever possible). It is important for both us and the MI to be notified of a sales offer immediately and simultaneously to avoid jeopardizing our claim under the mortgage insurance contract. A letter including the terms and conditions of our decision will be available to the servicer through the Home Saver Solutions Network shortly after we receive the servicer’s recommendation.
VII, 504.06: Special Financing Arrangements (01/31/03)
In most instances, the property purchaser should be able to obtain financing (from the servicer or some other source) without our providing special assistance. If the servicer provides the financing and the property purchaser satisfies our eligibility requirements and underwriting guidelines, the servicer may deliver the mortgage to us under any of our standard commitments.
We will consider providing financing on a case-by-case basis when a purchaser is unable to obtain financing elsewhere. We will offer market-rate financing to qualified purchasers in all geographic areas; we will also offer special below-market financing in certain areas. Special below-market financing includes competitive terms—such as down payments ranging from three percent to five percent, waiver of enforcement of the due-on-sale clause, closing costs assistance, etc. (A servicer may obtain more information about special financing by contacting its lead Fannie Mae regional office.) The servicer should make this information about special financing terms available to the real estate brokers it uses for preforeclosure sales.
When we agree to provide the financing, we will designate a lender to close and fund the new mortgage and to deliver it to us for purchase in accordance with special instructions we will provide at that time.
VII, 504.07: Mortgage Insurance Claims (01/31/03)
Fannie Mae will file all primary mortgage insurance claims for preforeclosure sales on all conventional first mortgages on which we bear the risk of loss and are insured under a master primary policy issued by one of the following participating mortgage insurers—Mortgage Guaranty Insurance Corporation; PMI Mortgage Insurance Company; Radian Guaranty, Inc.; and Republic Mortgage Insurance Company.
Although Fannie Mae will file the preforeclosure claims, servicers will continue to have the following responsibilities:
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Removing the loan from LASER with a code “71″; reporting the proceeds from the sale as a special remittance; providing the mortgage insurer with a copy of the HUD-1 settlement statement, a copy of the valuation, and a copy of the approval letter stating the terms and conditions of any short payoff; and submitting a final Cash Disbursement Request (Form 571) for reimbursement via MornetPlus/MortgageLinks; no later than 30 days following the preforeclosure sale.
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If the mortgage has flood insurance coverage, the servicer also will need to follow the procedures we have in place for determining whether there is any insured flood damage, and file any flood insurance claim that may be required.
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Generally, the servicer is not required to take any further action unless it is contacted by our eviction attorney and asked to provide certain information or documentation.
If the mortgage is insured by a nonparticipating mortgage insurer, or if the mortgage is not a conventional first mortgage on which Fannie Mae bears the risk of loss, the servicer will remain responsible for filing the mortgage insurance claim in connection with the preforeclosure sale. The claim should be filed in our name so the MI claim proceeds will be sent directly to us. Mortgage insurance or guaranty claims related to government mortgages should be filed under the standard claim filing procedures for those mortgages.
VII, 504.08: Accounting and Reporting (01/31/03)
The servicer must account for all preforeclosure sales and report them to us regardless of whether we are made whole or incur a loss. The servicer should report the preforeclosure sale in the first delinquency status information it transmits to us after it agrees to the sale (if we will not incur a loss) or the first delinquency status information it transmits to us after we approve a preforeclosure sale that will result in a loss. Once the servicer receives the final signed settlement sheet, the net sales proceeds, any cash contributions, and the executed promissory note (if applicable), it should report the completion of the preforclosure sale to us through the Home Saver Solutions Network.
For most mortgages, the servicer should code the preforeclosure sale as a “Third-Party Sale” (Action Code 71) in the first monthly LASER activity report that it transmits following the preforeclosure sale. The sale proceeds (and any cash contributions) should be remitted to us through the MortgageLinks Cash Remittance System. In addition, the servicer should forward a copy of the HUD-1 settlement statement and a copy of the claim for loss that was filed with the MI to the National Property Disposition Center within five business days after the sale. For MBS pool mortgages accounted for under the regular servicing option (and MBS pool mortgages serviced under a shared-risk special servicing option, RHS mortgages serviced under the regular servicing option, or any mortgages subject to some type of recourse or other credit enhancement arrangement), the servicer should report the payoff just as it would report the payoff of any other regular servicing option pool mortgages, since the servicer must absorb any losses and expenses related to the preforeclosure sale.
The servicer should request reimbursement for our share of all expenses related to the preforeclosure sale for a conventional mortgage—including the processing fee and the amount required to reimburse the servicer for the appraisal (however, uncollected late charges will not be reimbursed) by submitting a Cash Disbursement Request (Form 571). The servicer must retain the original invoices that support the expenses claimed in the individual mortgage file. For MBS special servicing option pool mortgages, the servicer should not request reimbursement for our share of the amount required to remove the mortgage (or participation interest in the mortgage) from the pool, since we will automatically reimburse the servicer for this amount after it remits the funds and reports the applicable action code required to remove the mortgage (or participation interest in the mortgage) from the pool. (also see Part X, Section 302.02)
When the county propery appraiser needed to raise revenues for Orange County Florida and the county approved 121 apartment developements to convert to condo’s, the value of condo’s fell like a lead balloon. I can guess a lot of politicians lined their pockets with green to get this passed. I was never made aware of the change until it had already been passed by the county commissioners. My $250,000. unit went to $160,000. practically over night due to this. My entire complex of 622 units have decreased by 50% in 6 months. If anyone needs to be rescued it’s the little guy like me who has just enough to keep from starving.
For a great expert on short sales you should speak with Claude Whited of Financial Health Coach down in Naples, Fl. He has 100’s of students.
I definately agree with short sales as being the way to go, but if you can find leads for short sales, you can still make a little money by referring deals to the investors who do shortsales while you figure it all out.
** If anyone needs to be rescued it’s the little guy like me who has just enough to keep from starving. **
I don’t follow how a decline in the value of your primary residence leads to starvation.
Partly what’s fueling the current debacle is the idea that one’s home is an “investment” instead of what it is: a roof over one’s head. A paradigm shift needs to occur in this country, in my opinion, relative to this issue.
If you were renting, and the apartment you lived in declined in value, would you be upset? Of course not; you would continue to pay rent until, for whatever reason, you had to move. In effect, until your house is paid in full, you’re renting from your bank. They own your property and you rented the money from them to purchase your home. Why people think that someone ought to guarantee that the value of their homes will never decline is beyond me. You need a place to live. You’re living in it. If you simply MUST sell, you’ve got a problem; otherwise, your home is going to fluctuate in value, just like any other asset, while you live there.
** you can still make a little money by referring deals to the investors who do shortsales while you figure it all out. **
Why would I pay you for a short sale lead when, for the same amount of money–probably less–I can generate such leads myself with little to no effort?
(Bryan, sounds to me like your short sale course can’t come soon enough.)
Update from Bryan —
EXCELLENT NEWS! We’ve secured an instructional session from one of America’s leading short sale experts and educators, Mr. Jeff Kaller. Click here for the details:
FREE Short Sale Training Webinar
This Loan Modification is a big scam, the attornies are the ones making the money by charging homeowners $3500.00 to do the paper work. if you are having problem paying the monthly mortagage , how can you find so much noney to pay the attorney? does the Barney Frank know about this ? Is yhis legal ?
Hi, Brian,
Wanted to weigh in a bit on short sales. I recently completed my first short sale with a minimum of problems. The thing that continues to nag at me: if the lender is willing to “short sell” a property to me, why shouldn’t the previous owner be given the opportunity to maintain a mortgage for the same amount? Obviously, there are many reasons homes end up in foreclosure, but certainly one of the most publicized is the adjustable rate mortgage. My guess is that the agreed-to sales price in many short sales would be a price that the previous owner could maintain assuming it was set up on a 30 year fixed (I’m sure that was the case in my recently-completed short sale). I think lenders and owners should share the pain this way: houses should be re-appraised now, which in most cases would mean the home would lose value. The lender should offer the owner a fixed rate loan for that amount. Net result: home owner loses equity but perhaps gains a loan that can be handled, homeowner is not displaced, lender loses what would have been generated with the ARM package but does not have to foreclose and incur all the costs connected with that.
I think Jim is right on the money. How many banks would have survived this crisis if they thought like Jim suggested (or if they would think at all)? How many owners would still be in their homes and have good loans? As front load interest weighs heavy on all loans and most of these loans are within 2 years of their creation, the lenders would still have years to generate profit. They will have lost out of some of the money that was generated from overly agressive strategies (greed) to refinance into pay option and Arm loans but they would be in business today and they would not have the resulting inventory woes that makes them insolvent.
Maybe thats a good suggestion for our government. Why should we the taxpayers pay for all the homeowner screwups and bank screwups if there are workable fixes like this to be had.
Pass legislation that requires re-valuation of home prices and then have lenders and owners engage in a new contract for the appraised value at 30 year fixed terms. Owners will have lost equity, their slap on the hands for getting into deals they couldn’t afford, and lenders would have lost interest, their slap on the hands for . . . many things, but all would be in place today and they would be able to survive the economic climate, which would not look like this if that had been the case. Hindsight perhaps? Still do-able perhaps?
** Pass legislation that requires re-valuation of home prices and then have lenders and owners engage in a new contract for the appraised value at 30 year fixed terms. **
Yes, and then let’s extend that legislation to the stock market. After all, stocks sometimes decline in value, too, and we can’t tolerate that, can we?
Modified loans often redefault. => http://tinyurl.com/5b7xaa
One of the most serious problems I see over and over in this loan crisis is the almost total lack of how any of this works by most people. When I say most people, I mean everyone!
The banks are hamstrung by regulations, all kinds of regulations and don’t forget the political threats too. I could work at explaining all of them but it would take pages, a book really, to cover the basics. Now don’t think I am going to defend banks I am not. I will just cover a few things first.
One huge problem banks have right now it mark to market. To express this in a simple way it means as a property is sold through foreclosure or short sale, they have to revalue all their holdings to the “New” lower valuation implied by this sale in this regulation.
The net effect is it takes huge amounts of “paper” money off their books reflecting less gross equity by the bank. This is one of the wonderful federal regulations that have crushed the credit market.
Another incredible crusher is Sarbanes-Oxley, without a doubt one of the worst pieces of legislation ever written. This is a more hidden one that takes the CEO to new heights of don’t want to get involved and don’t want to do anything that might make the shareholders unhappy.
These are just two of the rules that have gone a long ways towards crushing our economy in recent years. For those that want to blame someone look up the many pushers of these two pieces of legislation and blame them or just blame the idiot congress!
Now on the other side I see all kind of just plain stupid ideas put out by both citizens and politicians. Whenever you hear someone saying, “why don’t they?” I can tell you it is because they never took the time to read a contract and learn what all the stuff in it really means. Hell, most of the people holding the contract and telling you where to sign don’t have any idea what is being said nor why it is being said.
I will share with you a pet bitch of mine. title insurance. It is good for less than 24 hours, it cost too much and only guarantees, and well it doesn’t really guarantee anything. What it does do is state for the time it takes you to sign the contract until midnight they haven’t found anything bad about the property. Oh and by the way, if they missed something it is not their fault and they are not liable anyhow. Sounds like a great investment to me, NOT!
However, I digress; many people have well-meaning and great sounding ideas that are completely illegal. Short sales are one example of well meaning ideas, why don’t they offer the same terms to the homeowner. Because the law states it, is fraud and will get you federal prison time. What about the family? Even bigger fraud and more prison.
ARM’s are another vicious idea by the banks, well not really if you study the concept of “redlining” and its prevention, you will find it is what caused the concept to come about. The banks were trying to find ways to not be blackmailed by politicians. Has it been well executed no not really but it is the “law of unintended consequences.” What one-idiot politician does will affect us all and it won’t be good.
Listening to the crap by the news and from congress and even some of the uninformed ideas in blogs just make a person want to cry. Either the congress cannot or will not remember what they wrote last year or they just do not have any idea what any of it really means.
I personally think they just do not care what it means as long as they can be the center of attention they are happy. My two cents.
The real problem here is we have a tax code everyone agrees is impossible to understand legally impossible to follow. Everyone makes some kind of mistake that breaks the law, even if they file a 1040 EZ form they probably fail some test in the code.
Well that is what we have in most of our lives now. We have so many laws, rules, and edicts; it is not possible to comply with them all. What happens is it often doesn’t show up in a big way until we have a crisis, then we find we cannot move without breaking the law, then we find out huge groups are screwed and we have to change everything to make it better.
Problem is we just pile more on top of the mess and make it worse next time.
Congress will not get us out of this, they just point at someone else and spin like tops.
Banks will not get us out of this because they do not care and are not allowed to do anything even if they did. The new President will not help because he thinks he is God’s gift to humanity and does not have a clue how business works not does he care. He has what he wants now and screw the rest of us.
So who is going to help? Good question, time is not on our side right now and compared to the rest of the world we have it good still. That will not last too long. I think this will work out if we can keep the politicians talking and not doing. If we can stop the Dems from spending all the money in the world and if everyone just takes a deep breath and understand most of this will happen no matter what we do now.
When you are in a wreck you can often see it happening and often wish it would stop but it doesn’t and won’t, you are just along for the ride at that time.
I just hope the ride isn’t too long.
I would like to recommend D.C. Fawcett’s Foreclosure Wealth Seminar. I purchased his home study course at the beginning of the year and just finished a 3-day bootcamp on the course this weekend.
Before purchasing his course, I researched programs for nearly 6 months and then choose his. With his program, you will learn everything (and I do mean everything) you need to know to complete a successful short sale.
One of the things I’m most impressed with is the sales scripts he provides. I have been in sales my entire career and have always HATED sales scripts, but that is NOT true with the scripts he provides. They’re excellent and you will know exactly what to say, not only the potential seller, but to everyone you will work with through the short sale process.
This is a complete course…all the insturctions, forms, sales scripts, checklists, etc are included. DC truly does know the short sale process and he holds nothing back in teaching his students.
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