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Dede Galindo's Blog

By DeDe Galindo | Agent in Fort Worth, TX

Bail out the Banks?

Bailout the Banks? I am tired of hearing the banks whine. Not only did they give risky loans but they will not fix their policies to correct the situation. I am currently, working with a homeowner to sell his home before it goes into foreclosure. We received an offer, a short sale offer. The bank, American Mortgage Servicing Group, took 9 weeks to counter the offer. The Buyer has moved on to another house. The assigned representative tells me that the home will return to the foreclosure department and when I get another offer, the process will start again. I explained that Buyers will not wait 60 days or more to hear a counter or even an acceptance. Her next remark was regarding how many files that she is dealing with at any given time and that she could not keep the ones that do not have current offers.

There is the catch 22. The banks say that they will work with the homeowners to assist them but their policies and the overworked, uninformed employees do not help at all. It is in the banks best interest to sell the home before it forecloses. Selling the home keeps attorney fees lower, prevents the bank from having costs for utilities and maintenance on the home, costs for more taxes due and home owner association fees, liability of a vacant home sitting there, and more. But instead of the banks making the process easier and faster for the Seller and the Buyer, they make it almost impossible. Moreover, with an abundance of foreclosures, short sales, discounted new and resale homes available on the market, you would think it would be in the banks best interest to expedite a sale when they get a reasonable offer.

What is the answer? During this time when foreclosures and short sales are at an excess, the banks needs to examine their policies and hire and train more employees. Just look at the bank I previously used for an example: Why does the process have to begin all over again? There should be an employee who works these files in the interim. That employee manages the files once the file is approved for a short sale and the appraisal has been done. That person could keep the file updated so that when an offer does come in, that file moves to the top of the list. The files should be prioritized based on offer amount ratio to what the bank will accept and the Buyers requested closing date. When a Realtor is involved, that Realtor does a lot of the work; therefore, the Realtor should have a direct contact with that interim person to expedite the offers and documentation needed. Each bank is different but if the bank executives would talk to Realtors and their own bank employees involved in the process, this could all be simplified!

Overhaul of this system is my battle cry! Do not give the banks money for these foreclosures but force them to look at their own systems. If nothing is done, including not giving them money, it will all eventually work itself out like the market usually does. But my goal is to help the homeowners and save the banks money, thus helping our economy.

Comments

By Sean Kelley GRI,  Thu Oct 23 2008, 10:08
I couldn't agree more, it is amazing how incompitent some of these banks are with these properties. I have a listing the seller has not made a payment in 6 months and I tried to communicate with the bank as much as possible that I had the property on the market what can we do to expedite the acceptance of an offer when it commes in. I was told they dont do anything in support of potential short sale offers and I shoud just submit a contract when we receive an offer. I had an offer for 140,000 and it took the bank 2 months to even get it to a negotiator!! Ofcourse this buyer was long gone, I tried on several occasions to tell them that if they dont take this offer the next on would be way way less because of the condition of the home and the market. Guess what here we are 6 months later and I just submitted an offer for the same house for $70,000, NO JOKE!! Half of what the original offer was. If they would have been on top of it they wouold have saved tens of thousands on this deal alone. We need to quit flushing taxpayer money down the toilet for companies who wont take responsability for their actions.
By Wendy Cyr,  Thu Oct 23 2008, 10:09
I agree totally. I've been to several "short sale" classes and the more you learn, the more we realize that the situation is not being helped by understaffed and overworked clerical people in these lending institutions. Delays in responses to offers in our area make the "short sales" only 5% getting to closing. That means they go into foreclosure (more time and money being lost) with the result of lower prices, which in turn, hurt the neighborhoods in which these homes are found.

In the end, the American public loses, since we are going to end up paying higher taxes to administer this bail out. I am extremely frustrated with the bureaucracy of the current system and the short sightedness of these lending institutions. As realtors, we are trying to help with offers and qualified buyers. The buyers are frustrated and lack patience too. They are more likely to move on to other properties with the current delays. This needs attention now.
By Monica McNamara, REALTOR,  Thu Oct 23 2008, 11:14
Here's a scary thought. Some banks don't want to let the seller off the hook and agree to a short sale. They believe that their "bad loans" will be bought by the government and they won't have to take a loss on them. So they just need to sit on them a little longer. They can sell their worthless paper, effectively to us, the Amerian public, and they'll get their money.

Monica McNamara
Ocean City Maryland
Coldwell Banker Real Estate

The bad joke is that it is going to cost us all!
By DeDe Galindo,  Thu Oct 23 2008, 11:44
You are right about that! After the comments build up on this blog, I am going to send it to my congresswoman/man. I think they should understand the full extent of this problem. Thanks for all the comments!

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