By Todd Clark (Broker/Sales Coach) 503-524-9494
This morning I read a report that the President says the problem with the housing industry is short sales and he wants to fix it. I thought GREAT, ABOUT TIME! But then I read the article and quickly I realized that our President has no clue about what is going on with the housing industry. As with most politicians he thinks if we throw money at a problem, he thinks it will go away.
You see, the President says the problem with short sales is that the sellers don’t want to move out and that he is willing to offer $1500 to home owners to move out, so they can have money to move. WHAT? Since when do we have a problem with sellers not wanting to move out? Does he not realize what a short sale is? A short sale is where a seller puts his home on the market because he knows he is in trouble and wants to move. Now, I think this is going to be a huge chance for fraud!
You see, the real problem
with short sales is the banks are
taking so long to respond that the home ends up going in to foreclosure
and
that is when the sellers are refusing to move out. They tried to do a
loan
modification, they tried the short sale… the banks are the problem, not
the
sellers.
I think we are going to
see a lot of sellers take advantage of your
$1500
program and actually create the problem of sellers not moving out until
they
get their $1500 a real thing. Mr. President, if you want
to fix the
problem,
make it so the banks have to respond to short sale offers submitted to
them
within 30 days of being submitted. (The reason I say 30 days, is so
that gives
them time to do a BPO or an appraisal) If they don’t respond within the
30
days, they have to give a $500 a day credit to the home owner that will
go
toward back payments and principle.
I promise, if you do this, as soon as the banks realize that they are getting people out of default with their delays, the short sale problem will go away.
Todd Clark - Broker / Sales Coach
All Brokers Real Estate
Phone: (503)524-9494
Fax: (503)622-8739
Beaverton Oregon Homes for Sale, Beaverton OR homes for sale, homes for sale in zip code, 97006, 97007, 97008, 97005, 97223, 97224, 97124, 97123, Beaverton Oregon Realtor, Beaverton OR Realtor, Beaverton Oregon MLS Search, Beaverton OR MLS Search, 1st time home buying expert, short sale expert, avoiding foreclosure in beaverton, helping families home, LivingBeaverton, Townhomes for sale, home for sale, house for sale, Merlo Station, Hart Neighborhood, Greenway Neighorborhood, Sexton Mountain Neighborhood, Aloha Neighborhood, Lexington Neighborhood, Cooper Mountain neighborhood, Sorrento neighborhood, Murrayhill Neighborhood. Beaverton Oregon Real Estate, Beaverton OR real estate, Todd Clark, (503)524-9494, WWW.LivingBeaverton.com, www.IFoundYourNewHome.com, www.SavingyouFromForeclosure.com
©2010 Todd Clark - Mr. President, stop throwing money at the housing industry, that isn’t the problem
I agree Todd...the problem is not that the sellers will not move out, it's with the banks. Every bank has a different process and most are inconsistent with one another. Paying the seller to move is an overly simplistic solution that will likely complicate things even more.
Todd,
Sounds like a great plan to me, lets stop the delay in communication that leads to them getting thrown out of homes. It's so aggravating that banks are causing so many problems.
I had just had lunch with a high school friend today who was trying to figure out how to pay her mortgage off quicker. One easy method I recommended was making a two 1/2 payments a month, one on the 1st and one on the 16th. She said Wells Fargo WON'T accept these and credits them both for the 1st. I don't feel bad if they go under, this is just wrong. Obviously not as wrong as all the foreclosure and short sales stuff, but it's a testament to what is wrong with banks.
Sorry for venting:-)
No, the President does not get it at all.
All the best, Michelle
Todd - You're certainly right about politicians always seeing money as the solution to all problems--that's the reason the country is now essentially bankrupt. And the new program will only increase the amount of fraud, a significant problem in the First Time Buyers Tax Credit.
So Todd, what did you except?
This administration and their party are not about care or concern.
This is just another attempt to buy votes!
Sadly, so many are willing to sell!
Even sadder, the loyal opposition ran a senile candidate chosen by the press.
Not having voted for the disgrace is no defense if you didn't think and vote in the premieres you're getting what you deserve.
God help us!
Bill
You are definitely right about this one. Let's just get these banks to respond quicker problem solved--and the government saves some money.
Todd ---- all I can think to say is "Amen" -- great post.
Great post, love the graphics and agree with you 100% about the best way to solve the untimeliness of the banks when it comes to the way they deal with short sales.
Great post, Todd. And how about this....if the banks would allow the listing agent to send along a BPO (provided by a bank-approved appraiser) WITH the offer - we should be able to cut the required response time down to 10 business days. The current wait time is straight out of a Twilight Zone episode.
Great plan. 4 week delay might get the homeowner out of trouble too.
Todd,
I agree the problem is with the banks. The other problem is using realtors or appraisers from outside the area the property is located. Getting BPO's or appraisals which are simply unrealistic is also a huge problem.
Cal
I agree in general with your post. In my experience the sellers want to do the right thing, and give the house back to the bank and are cooperating to resolve the default. I don't think money is the issue to get them to move. It's the bank and the hoops and roadblocks.
Todd- The President and all those folks up in DC are so out of touch with those of us working in the trenches. Throwing money is all they ever come up. If the banks did not get all that bail out money they would be more apt to do short sales. It is not that they are taking too long, I don't even mind that, it is that they really don't want to do them. I think their stockholders need to be educated about what a short sale really is and then put pressure on their banks to approve short sales. Laraine has a great point, allow the listing agent to get involved with the BPO process. But they won't do that because they look at us as if we are the enemy. Remember, Todd, we Realtors are the ones who got Congress to keep them out of Real Estate, but they will still figure out a way to sell real estate! Katerina
Todd, if ONLY they understand what we do everyday. Offering them money to get out, is NOT what people are thinking or wanting.
errrrr
Hi Todd~ Throwing money around is NOT the answer at all! Getting the banks to do what they are supposed to do in a timely fashion is the answer!
Wait until the Commercial property market colapses, you aint seen a problem yet. 2011 will be the year of the downfall of the commercial real estate market, you thiink this president has problems, I wonder if he is going to buy all the office building, apratments shoppingcenters, etc. I see it already , shortage of moneys for deals, and existing property owners having problems getting refinanced right now on the local hometown deals..
The Big One is coming, watch for it!
If the banks would really do as they claim they are doing and modify mortagages for the home owners, the possiblility of the homeowners NOT LOSING their homes to foreclosure is greatly reduced---so I can only think that since the banks are not modifying loans, they would prefer foreclosure---why is that?: BECAUSE THE GOV'T IS SUBSIDIZING THEM IF THEY TAKE A LOSS! THE BANKS ARE CLEANING UP WITH THE HIGH RATE OF FORECLOSURE AND YES, SHORT SALE TOO!!! Banks are concerned about themselves only; the problem came from the banks in the first place from their over-exuberance to sell mortages; good ones, bad ones and just plain worthless paper to any one and his brother...then pushing their MDS to retirement funds as if they were top grade investments...that's what forced the value of homes to decline when the market softened and rates adjusted on the bad loans too.----does no one get this??? Banks were literally betting on the losses that were sure to come!....Throwing $1500 to the masses, meanwhile driving them out of their homes so the banks can get the money from the gov't to fill their tills is a bit like saying dis-missively: "Let them eat Cake!" Is it not???
The President is throwing money everywhere. Most of it doesnt make any sense to me. You have pointed out a very good example as to why our recovery is slow. Everything with govt. is slow and inefficient. The more the gov't gets involved the worse things will get. But that's just my opinion.
Todd, GREAT post! Spot on.
Judy Weinstock
www.seejudy.com
Wow, you are so right, I have been through this time and again, and every time it takes longer than 30 days which is almost every short slae I have done, the buyers get cold feet and withdraw the offer before we get an answer. I have had an offer in for 6 months, it is an inveswtment proeprty for me so I was not in a hurry, but most buyers who are intending to occupy just can't wait for the bank to respond. If only we could get a response in 30 days every time, we could do alot more.
This is a great blog and very true. I also love your white house clip art. Where did you get it?
Todd, your solution is clear, straight forward, makes sense and will work. All we have to do is get Washington to implement it.
Todd, I agree. Throwing money at the problem won't help. Short sales prices need to be approved before they are even listed. It a terrible process for the sellers, buyers and Realtors.
Todd,
What a great idea. This would go a long way toward assigning some accountability to the banks. I am tired of sending my tax dollars to prop up institutions with no clue and no accountability. I have lived through many markets in 36 years. The banks and the politicians have learned nothing from the savings and loan collapse. History provides a great lesson we always choose to ignore.
Todd - Brilliant idea. THAT would be phenomenal.
Hi Todd -- When I heard this, it made absolutely no sense whatsoever. I don't claim to be an expert, but I think that was one of the dumbest ideas I've heard on how to solve this problem. I would love to see your idea play out.
HSBC is already doing that. They gave my clients a $2500 relocation benefit. They are even offering it for Deeds in Lieu.
You are my aong~! I have 2 listed short sales, both now vacant because it's taken the banks months and months to respond!
Todd - I love your idea, it's something I've been hoping for.
Washington has no idea what real estate is all about! When will it ever end?
Great Post Todd! That sounds like the best plan I've heard. Money to move out? They can't wait to get out.
Can anyone say Ivory Tower? People have the money to move - hello, they are not making their house payments! They are socking away money for deposits and rent, and keeping current on all their other bills.
This is a colossal example of how out of touch politicians are with the realities of the housing debacle.
Wow Todd, at first glance I thought we might be going tow-to-tow but I read a little more agree with you completely. You head the nail on the head, that banks are the problem (and the investors behind the curtain). Janet and I have been in the short sale game for awhile and have some real scary stories to tell...
Keep up the posting (like if you could stop)!
Todd, sellers with short sales, if you offer them $1500, they want it. they won't move without it!
You are definitely right and your suggestion should be heard by authorities ASAP.
Todd, that is a good idea. Here's another: give the American people the money he gave to the banks. The money given to the banks would have gone a lot farther if the people had received it. Then they could afford to make their mortgage payments when they are downsized out of their jobs and there are no jobs available for them.
So maybe he should call it the "Cash for keys" program. The current administration just wants to drag this out. The result is slow an painful.
BOA can you read and hear this great offers and the house is not in foreclosure how can it take three months to acknowledge that you have the offer and will look into it.
Todd, You hit the nail on the head. The banks prefer to foreclose. They stonewall homeowners - unless - they hire an attorney. It is sad. I've seen many people try to get a loan modification and failed. The bank strings them along until they are on the brink of losing the house. By then there is hardly time to get a short sale accomplished.
This administration is totally clueless!!!!
Now that's a solution I think has some real teeth in it. I'm not blaming Mr. President for any of this mess. The clown before him earned all the credit. You are right that the banks are the problem, not the homeowners.
$500 per day might be cheaper for the banks than some of the delays we see where they keep losing value. Get the banks on a clock; I think it's a great idea, except I wonder if the answer would just be no if they had to make a decision one way or the other in those 30 days.
If they're coming close to deadline with no answer, couldn't they just decline rather than face the penalty?
I wish there was a way to speed it up, I just don't know what would work.
I agree that the answer isn't just to give the homeowners money, although I know most of my clients will be happy to take it. The answers lie in the banks getting approvals done quickly, efficiently, and accurately.
Todd - I like your idea. Way to think outside the box, my friend. :)
Isn't that the program that is supposed to be in place by April? As I understand it, the bank will get $1000 (I don't know from who), the owner $1500 for moving expenses, and banks are to respond within 30 days. The price is supposed to be determined prior to putting it on the market, meaning that bpos or appraisals are done BEFORE it is listed.
The question is whether the banks can comply. The real problem is that banks hire processors who have no real estate background and are swamped with files to move along. It isn't a recipe for success.
Todd, you are exactly right. All the short sellers I've run across badly want to move out and it's just very frustrating that the banks can't move on anything in a timely manner.
Hey Todd:
You got this one right as usual. My short sale sellers can't wait to move. I keep advising not to move until we get approval. What is Obama thinking?
Why is your White House pink? Is there some symbolism in that for the bleeding heart liberals?
Todd -
The only thing wrong with your plan is that the Congress is in the pockets of the banks. The Congress is incapable of such a law.
Barney Franks is merely out as committee chair...instead of simply being OUT.
Dodd is merely retiring.
Both belong in jail.
Their replacements will only be slightly less practiced at sticking their open palms out toward the bank lobby.
Oh Todd -- that just makes too much sense. Consequently it will never happen! It surely appears that the Government and politicians are NOT about making any sense!!
Sue of Robin and Sue
Todd,
I agree with you. The Administration does not quite get it. Obviously, they should've held the banks accountable prior to handing them the bail out money last year or year before? The root cause of the problem is the affordability for the home owners. If they just make a mandatory for banks to modify the loans or cut the principle down to market value prior to bail out money. The housing problem should've been solved to a some degree. We will wait and see.
Todd,
You are dead on with this, though this administration isn't to blame for the initial problem, that leads back to the last two administrations. But, the way it is being handled can't be blamed on anyone but the present people in office Republican and Democrat, it doesn't matter they are all to blame on this.
I really feel like the president should stop taking his information from bankers and come to the source, the people and their agents!!!!!
There still a disconnect between voters and the White House. .
This problem could be solved instantly by mandating banks to reach for a solution within a set period of time.
Very nice post
When industry outsiders start tinkering with real estate , nothing good usually happens ! This is like serving a last minute buffet to the folks on the titantic !!!!!!!!!
LOVE your solution Todd! Now that would rock some worlds and get things moving!
Well... you are right about the majority of your post except for the part about the Government telling private businesses what they have to do...
If a Private Business wants to rob their investors with inept business practices... so be it. I certainly know who not to bank with... or invest in.
Maybe if more short sale agents called out some of the certain banks... the bad PR alone would possibly change their ways.
I find it absolutley amazing how many agents complain about a certain big bank and how they handle their short sales ... and yet... the vast majority of the pre-approvals I see are from the same big certain bank.(How they handle their REO's is also suspect.)
I can't think of any other business that can treat their customers so bad and stay in business.
But of course... we voted people in that bailed them out with a three page contract.
And that's the real problem...
I'm campaigning / supporting the challengers to our inept representatives who actually vote on these bills.. I suggest you do the same.
I agree there should be a fine for not responding to a short sale offer. When they do they impose a $75 per day fee if the closing is late so why not turn that around on them.
The problem is the 535 representatives in Washington. Vote them out for having done such a bad job. Then the new senators and represenatitives should pay attention to issues at home rather than worry about being re-elected like the current group.
Todd:
So right. It's not the sellers who need to be more motivated but rather - the banks need to be more responsive.
Todd - I read this and came away as stunned as you. I think there is merit in your suggestion. Alas, deaf ears never hear reason
Can you imagine if we actually had the power to impose a deadline and a per diem on the lender if they delayed a transaction? I'd love to see the shoe on the other foot. Banks have to be dragged to the closing table of a short sale kicking and screaming. Not the other way around.
Where and how do we protest? Has NAR taken a stance on this yet?
Todd, without you having a link to the article that you are referring to, it's difficult to comment on the Obama plan that you refer to.
Hi Todd,
Love the post and the comments-$1500 wouldn't move me very far, how 'bout you?
I couldn't agree more. All of the short sale agents that I talk with say that most people do not know what to do so they go ahead and move out. I just read that Citi has a program by which they will allow former homeowners to stay in the home free for up to six months.
Todd - I'd say go a stop further. Once a Notice of Lis Pendens is issued, banks must immediately cease all foreclosure activities until all other available avenues to prevent the foreclosure are exhausted. That includes loan modifications, forbearances, debt repayments, refinances, and partial claims against mortgage insurers. Additionally, allow ample time for the homeowner to sell the home, and negotiate purchase and sale agreements (including short sales!) timely and in good faith (HONOR what you agreed to!). If the homeowners claims that the lender did not act timely and/or in good faith in any and or in all of these activities, then penalize the lender. Is $500/day sufficient? Just my 2 cents worth....
THIS IS THE ARTICLE I POSTED ABOUT YESTERDAY WHY WHY WHY CAN't THEY( THE GOVERNMENT) SPEND THERE TIME PUTTING FORTH SOME REGULATIONS, MANDATES IF YOU WILL FOR BANKS ON THE SHORT SALE PROCESS............
Just think how many un-necessary people you talk to in getting the deal done( if it gets done) and do not even get me started on the call centers some of the banks have are they even in this country?
I think Todd hit the nail on the head 30 days is a relevant time for them to make a determination and respond to the offer the banking industry has wined cried and carried on enough where they did get the bail out money but now drag there feet at helping the average Joe and I know everybody in real estate has had at least one deal (a short sale) that the offer was in to the bank in plenty of time and called and called worked the deal and the bank they were trying to work with drops the ball its very frustrating for all parties involved in the deal and the people on the other end of the phone( the bank) do not care one way or the other hourly workers pushing the pencil all black and white just numbers
I visited Hong Kong back in January, when i reached the baggage claim area after my long flight i waited and waited and guess what no bag the airline promised they would find the bag well it never came as a matter of fact it never left detroit the reason i am telling this story in short is kinda like the short sale process with the bank we all work hard list the home buyer comes and puts and offer in we submit all the documentation to the bank and hope and hope for a good outcome but for reasons out of our control the deal falls apart back to the baggage story when i contacted the airline about my bag i told them if they had to pay me 150.00 a day i would have gotten the bag the next day and if there company would mandate this rule they would be out of business in a month or make sure things got to there destinations on time
Thus back to Todds point they don’t respond within the 30 days, they have to give a $500 a day credit to the home owner that will go toward back payments and principle.
I promise, if you do this, as soon as the banks realize that they are getting people out of default with their delays, the short sale problem will go away.
well those are my thoughts, everybody have a blessed day :)
It is extremely frustrating. But I think that we need to stop assuming that the politicians and the banks "DON'T GET IT".
I think the very real problem is that they do, in fact, GET IT.
They are implementing the exact changes that have NO CHANCE OF SOLVING THE PROBLEM.
These are, sad to say, some of the most intelligent & educated people in our society. That does not mean that they are good human beings concerned with doing what is in the best interest of the American public.
WAKE UP! Americans need to WAKE UP and realize that there is something else going on here!
It is the blind (banks) leading the blind (government). AMAZING how so many idiots can be in office at once.
Some really great comments here.
How come nobody complained when loans were created that were No-Doc and other shady,risky ventures? Why didn't we complain about little oversight of the banking industry?
Todd, Great post, Wonder if anyone in the whitehouse has a clue?????
Often we expect government to solve minor crises by applying rules and regulations to assist in finding solutions. It’s obvious now that government should have let the housing market and most other markets self-correct. Certain people in power didn’t want certain other people (banks, companies, friends, etc) to fail, so someone hit go on the DC problem solving machine and like the tax code, ended up making matters worse. DC has begun feverishly gathering, writing reports, and slinging muck on how to make the bleeding stop. In my opinion what they need to do is apply a tourniquet and end all the zealous nonsense. People, companies, banks, and others who get in over their heads financially should be allowed to fail (a little compassion and regulation goes a long way, but too much becomes absurd). Generally, the faster they fall the faster we and they recover. The government’s trifling hundred dollar handouts to the public are irritating, rife with fraud, and haven’t solved anything.
I agree, and actually think that if the home is that close to foreclosure let the bank foreclose. It's time these banks stop messin around and start to recoup their losses quickly. Every time they get a house back onto the market the bank has the potential to earn again. Either way lets get this market out of the muck we keep making by throwing fake money(the money the government doesn't have) after fake money(the value the banks represented these properties for).
It appears more than a few responses wrongly confer the Bank Bailout to the Obama Administration. Bush did that people, Obama is trying to manage it.
I wonder in 2002 and 2003 and 2004 when the housing bubble was bubbling to it's top, how many realtors told their clients, don't buy now, prices are rising so fast, we are in a bubble, it will break and your house value will decline exponentially. Of course not, instead, the prevailing line was buy now, house prices are rising so fast, you can buy now and resell before your ARM indexes. We all do what we need to protect ourselves and our families, those in the industry and those moving to the streets when they lose their home.
I hope that many of you are actively working to create regulation to get the banks to do what you believe is right re: short sales. I hope your voice is not just heard on a blog.
It seems like Washington is just trying to aimlessly 'do something' no matter what the consequences are to taxpayers. I haven't seen any real solutions lately. Sad.
Terrific, common sense post! Frustrating as financing becomes more and more difficult. I.E. - Condo financing - these poor sellers will never get out of their condos because of the recent changes (restrictions).
FHA has been paying a bonus to short sellers for a long time. You have to stay in the property, maintain it properly, keep utilities on, and cooperate with the Realtor. Could we have a few strings attached please.
Fantastic post! The seller moving out of the house is never (or rarely) the problem. If he really wants to offer someone $1500, it would be better spent as an incentive for the banks to get the short sales approved in 2 - 3 weeks -- not 2 to 4 months!
Todd:
You got some great responses and a few are boarder line insightful. It is often hard to be part of the solution.
Terrific, Todd - and congrats on the featured post. Unfortunately our government thinks they can solve all of the country's problems by throwing money around and creating a new bureaucracy for the problem. The trouble is they keep spending money we don't have - our deficit is out of control. If we all did that in our personal lives we would end up in BK court. How long until our great country ends up there? The politicians need to wise up before it's too late ... BOTH parties.
Wow, read the article in the NY post this morning. What a joke. Who is giving the president his info? The problem remains that the banks are out of control! Start with them. The banks feel the rules don't apply. He needs to send out secret shoppers like the stores do, so he can see where the issue really is.
Great plan Todd. But I'm afraid it will never come about. Until we get the banks out of managing the short sale process, we're going to be stuck in this neverending loop. The banks have no financial interest in approving short sales in a timely fashion. In many cases, they have already been compensated for these underperforming assets or the loans were sold to investors and they're just an intermediary.
By the way... if the banks slammed through all of the pending short sales... it's likely the losses they would have to realize would technically make them insolvent.
Right now... they can get away with having overinflated values on the books.
There are several, several examples of banks not even foreclosing on properties... even though the sellers have not paid their mortgage in a year plus.
The changes in the Mark to Market accounting rules in April of 2009 helped to accomplish this.. Why do you think that despite twice as many home owners currently in default then September of 2008 (with bigger losses due to even lower home prices) that the "financial crisis" is (supposedly) behind us?
Hi Todd, I didn't see the report so I can't comment on the response. However, a bribe to the seller doesn't seem to be the right answer, at all.
an apt post. But I do not believe that Obama does not realize the reasons for short sales. I also think that he has probably spent alot of time listening to other people tell him how to fix every problem.....he just makes the wrong (but educated) choices
Todd a true liberal approach to everything is to throw more money at the problem more money will fix everything the believe this.
HURRAY FOR TODD! Excellent blog. I like everything about it.
i couldn't have said it better myself! get a grip on the banks mr. president! tell them to get their acts together...
Absolutely the best post I've seen this week. LOL You are spot on!
Hi Todd. Let us not forget that with HAMP it is another version of a negative amortization program. The home owner has five years to pay an adjusted amount not to exceed 31% of their monthly gross income.
It starts April 5th and runs through December 12th with SO many catches.
ONE catch is that the interest will be added to the back end of the loan so excuse me for a second but for me it's more like "Mr. President... please resign so that we can make changes to help distressed homeowners instead of helping banks and Goldman Sachs." ~ Lana
The other problem is that many of these homeowners would not have had to do a short sale in the first place if they were given the same deal OneWest Bank was given by the FDIC! The shame in all this is that we have uprooted all these families (will be interesting to see how this manifests itself in the children that are living through this when they get to be adults) made a mockery of the banking industry, once a bastion of conservative thinking and still we are not helping the homeowners who have done everything we have asked of them.
So true the problem being the banks. But saying it is the banks isn't enough. Sometimes it is the corporate folks who can't get system wide protocols set up so the individual lender knows what to do. Systems keep changing, no one will take on a case, they have groups working on cases so there is no continuity. The media is searching out and easily finding horrible stories that they are happy to share on the news, then there is our industry who is shouting this new idea will end up in a lot of fraud. So many alarms all going off at the same time, no wonder it is such a mess.
Great blog, you should actually send this to Mr. Obama... maybe he'll finally get it, or better, write about the mods that aren't getting done like he promised!
I read this article in the New York Times, and I think one of the big problems is the reporting about this program. Buried most of the way down the article is the fact that lenders will have to get a price from local realtors and then if an offer comes in above that price, the lender HAS to take it!! Depending on how implemented, this could be a KEY method of getting the banks to move on these short sales instead of sitting on them.
I agree that there is going to be a fraud concern, but I really hope that the teeth of this program is more about dealing the lenders. The $1500 for consumers I think is to address those situations where the sellers can't afford to move.
Sharona
Todd
That's one of the problems. Our government doesn't listen to the people, but whenever they try a fix, it usually makes it even worse.
I would think that NAR would be hot on this issue.
Thanks for the post
Great idea. I wish the government would do something to force banks to respond quicker to offers on Short Sales (isn't that an oxymoron!). Most Realtors don't like to show homes that are short sales because they know that they won't get PAID for a very long time.
Todd,
This is just another example of the government NOT solving the real problem and skirting around the issue. It seems like government is just looking for an easy answer instead of really delving into it. Sellers that sell short sale WANT to do the right thing. Otherwise they would let it go to foreclosure. Evidently President Obama has bad advisors or hasn't really done his homework. The banks ARE the problem!!!
I wonder if Obama spends his money like he spends ours?
I wonder if Obama spends his money like he spends ours?
I wonder if Obama spends his money like he spends ours?
I wonder if Obama spends his money like he spends ours?
I agree with you Todd. I have two short sale sellers and they are both MOVED out but the bank is NOT responding in a timely manner. The buyers for both properties walked because the banks were taking their sweet time... so, what's the problem? It's not the sellers Not wanting to move out... it's the banks NOT doing what they SHould be doing.
You have the answer to the problem Todd. It's too bad we do not have a direct line of communication to the President and just like I've believed the entire time, real estate agents are the ones who should be training bank personnel on how to do short sales...streamline is what I'm talking about! Congratulations on a well-deserved featured post!
The president is CLUELESS! He has never ran a business nor met a payroll!!!!!!!!!!!!!!!!
Hmmmm... very interesting. I didnt read this article and will have to check it out.
I don't think the banks want to fix the short sale situation. As long as they have PMI they are getting theirs.
The next 2 1/2 years are going to go by so freakin' slow... how do we get this guy out of office...
I agree with Joe #101. I would add that the crowd on Capital Hill is also clueless both Ds & Rs. None of them get it and probably never will.
Todd, why does the WH administration think that if we just throw a little money on a problem that it will all get better?! Money isn't the answer. Your points are hitting if right and the sooner the Lenders realize that we aren't the "bad guy" short sales can run a lot smoother. Great post!
Hi Todd-
Don't even get me started with what the President doesn't seem to understand and the outrageous delays that banks cause ready, willing and able buyers (and their long-suffering Realtors). By the way, why not 10 days? That's plenty of time for an appraisal or bpo.
--Sara
Well said... they have no clue what is going on.
Dear Lord, I know that I haven't talked to you that much, but this past year you have taken away my favorite actor, Patrick Swayze, my favorite actress, Farah Fawcett, my favorite musician, Michael Jackson, and my favorite sales man, Billy Mayes...
I just wanted to let you know that my favorite president is Obama....Amen
But there is more power to be created in Washington if they pass out the money themselves...
Great post. You'd think the government would consult with real estate and mortgage professionals before handing out billions of dollars.
I was watching Larry King the other night and Jesse Ventura was on (don't laugh, he actually made a good point). Jesse Ventura thinks we should completely do away with republicans and democrats and only vote for independents. I think it's a good point. Maybe then the government could accomplish something.
I also read somewhere that the amount of money the banks received amounted the the equivalent of giving every American $180,000. Throwing money at the public may have done something, but throwing money at a failed business model has never and will never be a good solution.
I like your plan better. I've come to understand Obama in that whatever he says, he means the exact opposite.
Mr. President: Stop throwing money at the housing industry; start throwing it at Me! =)
From the desk of David Dee,
Todd, would be nice to charge $500 per diem. That may help to facilitate the short sales.
Bravo Todd ! The idea of giving the banks 30 days to make a decision or get penalized is a great idea !
Interesting real estate blog. I have bookmarked for future reference. Hope to see such good things again.
Thank you everyone for the wonderful comments. Don't get me wrong this problem started long before President Obama and even Bush. But, both the way Bush and Obama have handled it has been very wrong. I know it certainly isn't all their fault by any means, it is more the congress and the senate and the lobbyists around capital.
I understand the president can't keep up on every topic, but that is why he has advisers and this time they are way off base with how to fix the problem. This isn't an attack on our president, this is just a helpful suggestion that the real problem isn't the home owners, but it lies with the banks.
I too agree that we need less government in private business, but as long as the private business has it's hand out begging for money from the government, then the government has the right to tell them how they should be spending their our money.
I would love to know if ANY homeowner has had a finalized loan modification...I have several homeowners that have had "trial" modifications...some of these have been extended 3 times, but not one has become a permanant modification.
I like the idea of the $500 day penalty...but.....it will come from taxpayer dollars judging by all the other government programs! That is what kills me...any government program is paid by the taxpayer...there is nothing free in life, but it's how it is marketed.
Sounds like a plan to me - yours, that is - at least better than what is proposed. We have too many people trying to fix the problem who just don't have the knowledge and understanding to come up with a solution.
Todd, I agree, that the short sale problem is the banks. They can't seem to get these short sales to closing in a timely fashion. It seems that when they run into a snag with one, that can be easily ironed out, they throw it to the bottom of the file, never to look at it again, where they could just fix the problem and go to closing. It's frustrating.
I agree - it is certainly a mess. Luckily, I haven't had to deal with much of it.
Great post! This bunch running Washington is very out of touch with what is happening on the ground in America, and on the ground in Afghanistan and Iraq too. I guess it would be too easy to meet with the heads of companies that can actually help get us out of this economic problem, rather than meeting with politicians in other countries, and bowing down to them saying Americans are brash and bold. Don't get me started....
Great post, and very interesting way of putting the ball in the banks court. It is very frustrating for the homeowners, realtors, new buyers and mortgage company, when everything is up in the air. Our referral realtors have been having some luck with a company called Qualify to Modify. They offer an online web based application for the homeowner to fill out, which then creates a homeowners assistance package for the client and realtor. They offer this for both loan modifications and short sale requests through waterfall technology that the banks use. It is better to know up front, than to wait 30-60 days. We all need to find better ways to handle the chaos within the housing crisis!
AWESOME! REBLOGGED WITH MY 2 CENTS ADDED.
Hi, Todd. You summarized the "problem" awesomely.
I think that it's okay to throw money at the ROOT CAUSE of a problem. However, I think you're right. The homeowners cannot get a load mod, and they cannot do a short sale. So they have to foreclose. I guess that it makes that foreclosure portion go a little more smoothly with fewer interruptions during the moveout process. Plus, fewer of the foreclosed properties should be damaged either from neglect or malicious anger.
The real problem is that banks have no incentive to hurry the earlier portions of their business. Why should they act more quickly to lose more money? I don't blame them.
It's tough not to jump to the conclusion that the gov and the banks were in bed together on this one. The $1500 dollars is chump change for the bank compared to the eviction and repair costs. How many times has an investor had to do that?
I hope they used a condom, because I sure don't want any of THEM breeding.
You see, the real problem with short sales is the banks are taking so long to respond that the home ends up going in to foreclosure and that is when the sellers are refusing to move out. They tried to do a loan modification, they tried the short sale… the banks are the problem, not the sellers.
oh ya ,, more problems thanks to more govt help
I read about the proposed "FIX" and then read this blog. Accurate. Who cares about such small sums? Really! We've got homeowners who are way beyond a $1500 fix.
PS--Good explanation Todd. I reblogged this. Thanks.
Agreed! Excellent idea, now if only the government would LISTEN!
All good points/comments above for sure.....It isn't easy these days and I don't agree with how things are being handled. It isn't helping things....
Patricia/Seacoast NH
This administration throws money EVERYWHERE! Why, because it isn't their money, and the more they can make everyone feel that they need help from the government, the more power they have.
We have buyers ready to buy at market value, and the bank has been taking forever! Now the buyer has to move out of their rental and will need to pick a different home because he doesn't want to move twice! Sincere buyers looking for a home cannot wait forever! I hope someone somewhere gets the message and fixes the real problem. Another bank turned down $150,000 for a short sale and then foreclosed and turned around and listed the home for $99,900. It ended up selling in the 70's. Go figure!