They always say not to speak out in anger. My horoscope today said whatever happens, let it go. Well, too bad. Here goes...
The short sale business is a tough one. Lately there have been lender changes that have made it even tougher. For starters, the lenders/negotiators on the bank side have decided that the truth is optional. While this is no surprise to anyone in the business, it should not be allowed. When a family's financial destiny is on the line, the truth is mandatory. However, the lenders are now in full blown, lying, bait and switch mode.
What can we do about it? Well we can't control their actions from this side. However, we can manage expectations from our side. With that said, here is my Short Sale WARNING:
Lenders are out to get the most money they can. They don't care about the homeowners, buyers, agents, investors or anyone but themselves.
Lenders are not bound by honor or honesty. They will change the rules on you right after they make a commitment. That you can count on. While their actions are truly fraudulent and criminal, there is nobody to police them. Our government has failed us.
Lenders are owned by stockholders. The policymakers and decision makers at the lenders don't have a pot to pee in - yet they have the power to wreak havoc on the financial lives of millions of people. The owners of the lenders, the stockholders, are just along for the ride and ultimately will suffer the losses these idiot lenders have brought upon themselves.
So, in closing, if you are doing a short sale, this is what to expect. The commitments and guarantees of the lenders are worthless. All we can do is see it through to the end. Be prepared for anything. You have been warned...
Rich
Tuesday, July 13, 2010
Friday, July 09, 2010
1 in 7 Million Dollar Mortgages headed to Default
The Rich are biggest defaulters
According to the real estate analytics firm CoreLogic, more than 1 in 7 homeowners with mortgage loans in excess of a million dollars are seriously delinquent. Whether it's their residence, a second home or a house bought as an investment, the rich have stopped paying mortgages at a rate that greatly exceeds the rest of the population. By contrast, homeowners with cheaper housing are much more likely to keep on top of their mortgage. Only about 1 in 12 mortgages below the million-dollar mark is delinquent. CoreLogic data suggest that many of the well-to-do are purposely dumping their financially draining properties, just as they would any sour investment. “The rich are different: they are more ruthless,” said Sam Khater, CoreLogic’s senior economist.
Lenders are fearful that many of the 11 million or so homeowners who owe more than their house is worth will walk away from them, especially if the real estate market begins to weaken again. The so-called strategic defaults have become a matter of intense debate in recent months. The delinquency rate on investment homes where the original mortgage was more than $1 million is now 23 percent. For cheaper investment homes, it is about 10 percent. With second homes, the delinquency rate for both types of owners was rising in concert until the stock market crashed in September 2008. That sent the percentage of troubled million-dollar loans spiraling up much faster than the smaller loans.
According to the real estate analytics firm CoreLogic, more than 1 in 7 homeowners with mortgage loans in excess of a million dollars are seriously delinquent. Whether it's their residence, a second home or a house bought as an investment, the rich have stopped paying mortgages at a rate that greatly exceeds the rest of the population. By contrast, homeowners with cheaper housing are much more likely to keep on top of their mortgage. Only about 1 in 12 mortgages below the million-dollar mark is delinquent. CoreLogic data suggest that many of the well-to-do are purposely dumping their financially draining properties, just as they would any sour investment. “The rich are different: they are more ruthless,” said Sam Khater, CoreLogic’s senior economist.
Lenders are fearful that many of the 11 million or so homeowners who owe more than their house is worth will walk away from them, especially if the real estate market begins to weaken again. The so-called strategic defaults have become a matter of intense debate in recent months. The delinquency rate on investment homes where the original mortgage was more than $1 million is now 23 percent. For cheaper investment homes, it is about 10 percent. With second homes, the delinquency rate for both types of owners was rising in concert until the stock market crashed in September 2008. That sent the percentage of troubled million-dollar loans spiraling up much faster than the smaller loans.
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