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Replies (5)
- Steve Neuenschwander, "SteveNeuen"
- Contributions:281
98 percent of all short sales and foreclosures are fraudulent. Google "foreclosure fraud cases" and Neil Garfield and you can discover for yourself. As an agent involved in the listing and sale of short sale and foreclosure you could be an accessory to fraud (5 to 10 years in a federal prison) for passing titles that are tainted to new buyers. Simply put, the wrong lenders are claiming ownership to the titles and trying to foreclose. The above references will prove me right. See for yourself. Send me an email and I will provide you another link on how you can be a positive influence to these homeowners rather than put your hard earned real estate license and your personal assets in jeopardy.
- abccpa
- Contributions:1
This is happening to me right now, I own a home, there was a good offer, the bank set a trust deed sale after they told me they will entertain any market offer. Why is this happening?
- Jonathan Rainer, "RainerRR"
- Contributions:74
Steve, if 98% of foreclosures were fraudulent, then it wouldn't be happening. This may be a bit of a case of over-reporting by the media on microscopic problems. Owners can file a counter to a foreclosure even in non-judicial states, so if I were paying my mortgage and then get foreclosed on, I would contest it...and I would win. These aren't fraudulent.
Latika, I head recently that one bank in our area, Macon, GA, that took over a failed bank wasn't working with short sales. Since they took over the failed bank, the FDIC gives them insurance proceeds whenever they have to foreclose on the failed bank's assets....so they get compensated for the losses, and it isn't worth the time and effort to do a short sale (or they don't get the same compensation on a short sale...not sure). The same may be true for FHA backed loans...the banks will get insurance proceeds, but may not get as much or any when they do a short sale....that's why they consider the value to be "too low." Technically, to them, it isn't the offer price you're sending them, it's the total package: the sale price plus mortgage insurance proceeds (PMI, FHA, VA, etc.) from a failed loan. That's my guess!
Mortgages are a business like any other. They analyze a deal like you would when selling a home. If you received two offers: one for market value and one for even 1% over market value, you'd likely take the higher. The banks may be getting a few more dollars out of the deal if insurance proceeds are involved...or the government is going to buy "troubled assets" anyway.
Latika, I head recently that one bank in our area, Macon, GA, that took over a failed bank wasn't working with short sales. Since they took over the failed bank, the FDIC gives them insurance proceeds whenever they have to foreclose on the failed bank's assets....so they get compensated for the losses, and it isn't worth the time and effort to do a short sale (or they don't get the same compensation on a short sale...not sure). The same may be true for FHA backed loans...the banks will get insurance proceeds, but may not get as much or any when they do a short sale....that's why they consider the value to be "too low." Technically, to them, it isn't the offer price you're sending them, it's the total package: the sale price plus mortgage insurance proceeds (PMI, FHA, VA, etc.) from a failed loan. That's my guess!
Mortgages are a business like any other. They analyze a deal like you would when selling a home. If you received two offers: one for market value and one for even 1% over market value, you'd likely take the higher. The banks may be getting a few more dollars out of the deal if insurance proceeds are involved...or the government is going to buy "troubled assets" anyway.
- Angie Boggeman, "angie boggeman"
- Contributions:469
With most lien holders the short sale department and the foreclosure departments are separate. They do not necessarily discuss among themselves.
- RichardReid
- Contributions:197
Jonathan is on the right track here. The bank is looking at the best net to them. The type of loan and PMI involved up front makes a big difference in the amount of money they can collect from various sources.
For instance - normal PMI on a mortgage typically only insures the issuing mortgagor up to 20% or 25%. This makes a short sale a reasonable possibility.
An FHA mortgage is backed for 100% of the value of the loan - making a foreclosure much more likely.
You have to do your best to understand the whole picture as it appears to the bank to know 1) if it's worth taking the listing (as an agent) and 2) how best to structure a deal to put the bank in a position where they want the deal.
In most cases the person working for the bank - or even more likely a servicing company - has no vested interest in getting through a deal.
This creates an unbalanced relationship for the course of the deal, and can be very frustrating to buyers (and agents).
For instance - normal PMI on a mortgage typically only insures the issuing mortgagor up to 20% or 25%. This makes a short sale a reasonable possibility.
An FHA mortgage is backed for 100% of the value of the loan - making a foreclosure much more likely.
You have to do your best to understand the whole picture as it appears to the bank to know 1) if it's worth taking the listing (as an agent) and 2) how best to structure a deal to put the bank in a position where they want the deal.
In most cases the person working for the bank - or even more likely a servicing company - has no vested interest in getting through a deal.
This creates an unbalanced relationship for the course of the deal, and can be very frustrating to buyers (and agents).
Trend: Banks Foreclosing on Short Sales
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- 4.8/5.0
- (1 review)
Contributions:45This has been very disappointin to the agents that are party to the transaction, and it gives the seller a foreclosure on their credit report that could have otherwise been avoided. I have had the banks tell me they are denying the short sale because the value is to low. However you quickly realize this to be a flat out lie, when they list & sell the property after foreclosure for less than the Short Sale price.
Thus it appears the banks are making money on the back end, although I have seen them do this on FHA and 80/20 loans.
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