RealTown's RealTalk

We, as an industry, must find a way to lobby to make mortgage brokers and lenders more responsible for the unbelievable damage they do. FIVE months ago, we got an offer on one of my short sales. The buyer and seller were both completely proactive in the process, and in mid-May, we got our Short Sale approval and were supposed to close before Memorial Day. At the last minute, the buyers lender said that he needed more time - perhaps a week. This man led all of us to believe that 'docs would be to title' in the next day or so for so long that I had to get an extension of the short sale to close. I have numerous emails from this person stating that the loan process was going well and that 'we would have docs in a few days'. Last Friday, I was told via email, that we would close no later than today.

Imagine my horror when he sent us a Disqualification letter today with a terse ' I'm sorry '. The foreclosure on this property is August 13! Now we don't have an offer for the lender, and they can escalate the foreclosure.

It is important for you to know that this man took this trusting buyer from a 5% down loan to a 10% down loan and told them that the funds needed to be 'seasoned'. He TOLD them to keep their money in the bank and pay their bills late, as they 'would close before the lates hit their credit report'.

Well, they foolishly did everything he told them to do, and now they have lost their house, the sellers have a good chance of going to foreclosure (when they had a SURE short sale), two agents won't get paid, and a handyman will be filing a mechanics lien to cover about $1000 he was due at this SURE closing.

In my opinion, this lying, lender has committed a criminal act, yet there is no government agency to hold him financially or ethically responsible. I was the listing agent on this file, so did not have control of who the lender was. WHY would he lie to us for months? What can be done to make sure that this man is taken out of the lending industry, for good, so that he won't cost others their livelyhood and their dreams?

Deede,

I feel your frustration and have experience very similar situations.
I am in South Florida, so I am speaking for this region, but Chase is taking about 70 days to originate a loan, BOA and Wells about 60..
Asking and getting extensions is hard enough in a non-distressed sale but when dealing with short sales, the whole picture turns much darker...
The same lenders that take 60+ days to originate a loan, approves the short sales giving the buyers 30 days to close! Makes no sense.
Deede, my suggestion to you is to find a lender that funds their own loan, preferably, locally. Those lenders can close as quick as 10 to 15 biz days.
Explain to buyers the current lending environment and ask them to get pre-approved with such lender. Of course you cannot and would not force them to use that lender but that preapproval will come in hand if the lender they chose cannot close the deal.

Help lots of people and have a great day!

Patty Da Silva, CDPE©, RESS®, AHWD®, e-PRO®, GREEN, CFS
CERTIFIED DISTRESSED PROPERTY EXPERT© and Real Estate Short Sale Specialist®
BROKER Associate REALTOR® & Licensed Mortgage Broker - http://www.twitter.com/pattydasilva

Visit http://www.pattydasilva.com for SouthEast Florida's best properties.

We wouldn't want to regulate the financial industry would we?

Let the free markets work!!!

Mitzi,
I had a similar situation in 1999. The lender was trying to alter the terms of the original note and refused to allow a cash buyer to purchase the property to force her into foreclosure.

The steps I took (in addition to detailed notes and name taking for my records) were:

1. I went as high in the company itself as possible
2. Consulted the client's attorney (with client's permission) to get all the pertinent details possible regarding background)
3. Notified the State Attorney Generals and Governor's offices for both states involved (the state where the lender is licensed and the state where the property is located) and initiated an investigation
4. Contacted HUD as to the violations and got their advice and guidance and initiated an investigation into their policies and practices
5. Registered complaint with the SEC and initiated an investigation

The result was that two lender reps were fired, a manager was demoted, the transaction was allowed to proceed (without additional penalties imposed as they had threatened to impose) and my commission was paid in full.

I don't know if any of this will be of any use to you but it might help - Good Luck!

I was appalled at an ad I saw on TV recently. I wish I could remember the name of the lender.

They're advertising low interest mortgage loans up to something like 97.95% of the value of the home. Promoting it as a way to reduce monthly payments or buy that cruise you've been wanting.

Wasn't this how we got in the mess we're in now in the first place? You'd think someone would put an end to their shenanigans.

Should the govemment regulate it? Since we can't seem to be upright citizens without a big brother standing over us, I'd say it's not a bad idea!

Kathleen

Mitzi Romiti says "I think we should start a list of lenders who are such low life creeps. I would like to nominate National City/PNC to head up the list. If we don't give them the loans to start with, we and our sellers won't need to go through this with them when there's a problem."

Mitzi,

As much as I may love the sentiment, this sounds way to much like an anti-trust violation for comfort.

Michael Richman, MUP, MBA
Graduate Realtor Institute, Instructor Training Institute, Seniors Real Estate Specialist, e-Pro, Certified Buyer Rep
Licensed Real Estate Broker
Herndon Eagleton Real Estate - Here For You
450 7th Avenue, Suite 948 New York, NY 10123
Phone 917-991-2528
mrichman@HerndonEagleton.com
http://www.HerndonEagleton.com

-------- Original Message --------
> From: Mitzi Romiti <RealTalk@RealTown.com>
> Sent: Thursday, July 23, 2009 11:20 AM
> To: Michael Richman <mrichman@herndoneagleton.com>
> Subject: RealTalk: RE: WHAT Can We Do About These Lenders??!! ID00E6UK
>
> Deede Wockenfuss wrote:
>
> >> We, as an industry, must find a way to lobby to make
> mortgage brokers and lenders more responsible for the unbelievable
> damage they do. <<
>
> I think we need to warn each other who the anti real estate
> companies are too. I've been dealing with National City, now
> owned by PNC on a short sale. They are the second trust holder.
> Even though it wouldn't make a dollar difference in their take
> from the proceeds, they insisted that the commission be lowered by
> 1%. I informed the person I was speaking to that she was
> interfering with a contract which is illegal. She said she
> didn't care, it was their policy. This, even though the 1st
> trust is a Freddie Mac loan, and they are the ones who have to
> approve this package. They approve a 6% commission when there are 2
> real estate agents involved.
>
> Now that they've been informed that their proceeds will be
> $3,000, they want more. They are insisting that the owner (who is
> my daughter) or I, the real estate agent come up with $3,000 cash
> at settlement to satisfy their investor, or they won't release
> the loan. Now the buyer on hearing this has backed out of the
> contract. Sounds like blackmail to me. They told my daughter
> yesterday that they will sue her for the entire balance, so are
> probably going to force her into bankruptcy.
>
> As low life as the people at National City/PNC have been, the
> first trust holder who are Fifth Third Bank couldn't have been
> nicer, or more helpful.
>
> I think we should start a list of lenders who are such low
> life creeps. I would like to nominate National City/PNC to head up
> the list. If we don't give them the loans to start with, we and
> our sellers won't need to go through this with them when
> there's a problem.
>
> Mitzi
>
> Mitzi Romiti, Associate Broker, GRI, e-PRO
>
> Direct line: 703-241-7935 MailToMitziRomiti@juno.com [Link: mailto:MailToMitziRomiti@juno.com]
>
> www.NVaRealEstateSales.com [Link: http://www.NVaRealEstateSales.com]
>
> www.Northern-Virginia-Real-Estate.com [Link: http://www.Northern-Virginia-Real-Estate.com]
>
> For property information in real time [Link: http://www.2hdb.com/Mitzi]
>
> Serving Northern Virginia since 1985
>
> .
>
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