Well we got word back from one of the banks we are working to approve a Short Sale in McDowell Mountain Ranch in Scottsdale and the answer was a big FAT NO! I was shocked! In this real estate market every sold Short Sale means one less Foreclosure. With the condition of this home is also means $20,000 pumped into our economy. Plus this buyer is paying cash. That pays off a loan with cash and puts more money into the system.
Some of you may wonder why I am so shocked the bank is rejecting our Short Sale, the why is because almost all other Short Sales we have dealt with have eventually been approved. As a matter of fact, this Short Sale was approved with a different buyer. But as we see happen so many times, by the time the short sale was approved, the buyer bought another home. The buyer told us all the way up to the week before approval they were still waiting, in reality they had already bought another home.
The disturbing part of this is WHY?????? Why was the Short Sale rejected by the bank, when property values are dropping in the Scottsdale real estate market? You are going to be shocked by the answer. One would think, maybe not a good enough deal. No, for the condition the renter left the home in, it was a market value sale. The reason was, the bank said and I quote, "this is not enough pain for the seller." You see our first loss mitigator was gone and a new one was assigned to represent the bank. The new one is pathetic. This bank is owned by, or at least funded by, the US government right now.
Isn't this suppose to be about dollars and sense?
Is this about revenge?????
Truly, the seller does not care about their credit. Their credit is already trashed and at their ages there is no desire buy homes. The seller wanted to do the right thing and try to get the home sold now and not run the market lower with another foreclosure. The seller is retired and has lost a fortune. We have been working on this since the beginning of DECEMBER.
WHO IS REALLY TO BLAME FOR THIS MESS????? This is not a hard question.
1. The Public. They refinanced out all their equity. They bought homes they could not afford. "Impostor" investors bought 10 homes with no ability to repay. They got 100% financing. They did stated income or "liar loans." They thought things would never go down. They did most of this because their loan officer told them to or that it was OK.
2. Wall Street. They bundled poor quality loans with A quality loans and claimed they were all A quality. This drove the demand for low quality loans and made them easier and with lower interest rates. Folks, this was FRAUD. Most of these guys made their fortune and have moved on.
3. The Mortgage Companies. First of all, let's get this straight, the banks new what they were doing and what would happen! Sales managers hired sales persons and told them it was OK to put everyone in a 100% loan using stated income. They make much more money on these types of loans. They sold people with $50,000 a year income or even no income 10 houses. They were the financial advisers to the public and "put them into these loans." The reality is most borrowers didn't even know what they signed.
Many have ripped on the public for buying these liar loans, stated income loans, sub prime loans, interest only loans, adjustable rate loans and what ever else is out there. Do average Americans read the one inch prospectus for each mutual fund their retirement is invested in? Do average Americans read their life, auto, health and/or disability insurance documents?
I believe the answer is NO, most Americans don't read any of that. They rely on the financial professional, as did borrowers in getting these loans.
Let's get back to my borrowers on the short sale. They are investors, and believe me we are doing plenty of short sales for investors. They put 20% down on this purchase, $200,000. There is no recourse by the bank if a foreclosure occurs. Yes, they own 10 other homes, but most are upside down. They are actually paying to keep them a float and not go into foreclosure. They sold this home because the tenant trashed the house and they did not have the $10,000 to invest into it to get it rehabbed for rental.
What makes them be treated differently than the guy that bought 10 homes with NO, I mean ZERO, money down. Then when the market changed, this example investor kept all the rent and finally at last sells them in short sales. Only to claim bankruptcy after this is all over. I will tell you the difference, this guys(example investor) greed is what caused the issue. This type of person was a big part of why we are in this mess today. Hey, most of these guys made $500k on the first round. Lived big, spent it all and then lost in the second round.
Why would a bank penalize the smarter investor? The one that actually put money into the investment. The one that is trying to do the "right thing." And penalizing in a way that will not hurt them, it will only hurt the bank. The bank will loose $20 to $50K through this action. The bank should be more concerned with THE US TAX PAYERS MONEY THEY ARE WAISTING AND LESS WITH INCREASING THE LEVEL OF HURT FOR THESE PEOPLE!
Just my opinion...Jeff Cameron
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