First of all, I would like to say that I know not everyone in the banking industry is the same, and I also know I have been pretty harsh with how I've treated some mortgage brokers in the past. But, I've always done it with my client's best interest in mind. If you don't believe me about being harsh when it comes to my interaction with mortgage brokers, please read my blog from last August.
But, this time I have a home that is in a short sale situation, and I must say I'm actually starting to have a good experience with a bank.You see, even though the house is in a short sale situation the owner wants to pay the bank every last dime they are owed!
My client has perfect credit, never been late on a payment, and isn't your typical home buyer or seller, he is a home builder / contractor. He has an amazing remodeled home, but he now owes more on the home that it is worth. However, he doesn't want to ruin his credit or have the property be foreclosed on. He wants to find the right buyer and make this a great home for someone.
You see, my seller owns this home and two vacant lots that he hopes to build on in the next couple months after someone buys them. He wants to keep his perfect credit, but doesn’t have the money right now to pay the bank what they are owed if the sale goes through.
So here was the proposal and I thought it was a great one. He will continue to pay on time every month and when the property sells, the bank pays for the fees for closing, agents, and whatever other fees are needed to be paid. Whatever the difference between the banks net and what they are owed will be put in to a new loan on one of the two vacant lots that are free and clear. Then when they sell, the bank gets the rest of their money, more than likely within 3 months time. A true win-win for everyone, or so I thought!
I called loss mitigation for the bank and was, within 90 seconds of getting on the phone, with a senior loss mitigation person that said they would never even consider that! I even asked so if you are going to ruin this guys credit anyway by doing a short sale, why shouldn’t he just stop paying now and save the $45,000 in payments and live rent free for the next 9 months? She told me that, “Well that would be his choice and he would have his credit ruined if he did that.” I then said, “Well you already told me you aren’t willing to work with him and so his credit will be ruined anyway, so why not save the $45,000 dollars?” She then said “Sorry.” and basically hung up on me.
I had to find out why would the bank be willing to take an $80,000 loss on a home when that same $80,000 would pay that loss mitigation person’s and one other employee’s salary for a year! It just didn’t make sense to me and I had to find out why!
Now, this is where I got to be me and couldn’t take no for an answer. I decided to write a letter to the CEO of the company and explain the situation to him and see if he could answer why his bank would turn down an offer to get paid in full from a long time, and great, customer of theirs. To my surprise, I got an answer back within 36 hours and on top of it, he e-mailed my letter and his response to every senior manager and person he could think of in the company that this was not the proper response to what was a great offer, and that they needed to look into it and get this resolved to be a win-win for everyone involved.
So, to the CEO of this company that was willing to think outside the box and see a good offer when it is put in front of him and not go with the status quo, thank you. I also promise that once this is done and over with, I will announce the banks name and CEO’s name and congratulate him on doing something different to help my client and
Todd Clark (Principal Broker)