Central Florida Short Sales: Lenders Once Again Didn't Kiss Us Before.........

Reserved for TLW

Link not working for the article but I think that it might make the process go faster depending on the state.

Thanks Lyn. I fixed the link. The process of deed in lieu may be faster but it eliminates short sales. That's not good for the sellers credit or my buisness.

BB - would love to read the article but the link doesn't work. What kind of impac does this have on the homeowner's versus short sale?  Seems like once again lenders are getting paid to screw homeowners. It's all amout the money.

Jeff

BB - I just read the article a minute ago - you are so right! We teach and we preach to our sellers, only to get smacked in the face by those lenders. 

The article claims the deed in lieu is not "as bad" to the Seller's credit rating as a short sale.  Can you identify what "not as bad" means to the Seller? Does it stay on their record as long, or is the time period abbreviated vs. a short sale? or what?

I just read the article and that just stinks when many Realtors worked long and hard to assist these clients to help save their home or assist with the short sale process.  Also, I bet the large incentive monies come when you use their mortgage company to finance the new buyers!!!  They got house (maybe with some equity so more $$ to BofA) and then they list it on MLS saying they must get qualified through BofA first and then the prospective buyer gets the $15K sales pitch!!!  I bet you this is how the dice will roll!!!

So many reasons to love Bank of America!

Cheers,

Robin

Ah, and they think they will make out better because, as we know, they are so good with foreclosures? HA! Jackasses. BB, you are right, they suck. I can't believe this crap, ramming it right down the throats of the people we are so desperately trying to help.

I have NEVER heard of a home where the lender didn't agree to the short sale selling for more than the short sale offer was. I have never YET seen a foreclosure that was in pristine shape like the short sale I have now. Are you kidding me?

What the hell is wrong with these people... I am in total disbelief here. I would say more but... nah, nevermind. What is the point anyway.

They do suck...

I can't believe the seller is dumb enough to accept a deed-in-lieu over a short sale.  What are they Thinking?  This is not acceptable!

I guess finally they negotiated our commissions to 0% 

You are right about your title. . .the smell of Vaseline emanates from this post!

I've never heard of this Bryant.  Truly unbelievable.

Then they put it on the market as an REO for $40,000 less than anything else on the market and really make the neighbors mad by lowering their property value even more. Yeah, that makes sense! (NOT)

Isn't it against the law for banks to own real estate????

coming back and thinking about this last night. . 

where is the incentive for the lenders??. . they have to pay someone a commission anyways. .

and if I'm not mistaking, in a judicial state, they will still have to court to get the rights to sell the property again. . . attorneys fees are involved. 

then another reason why they should not favor a lieu is. . 

. .it is a passive form of a foreclosure. .but they have another foreclosure in their books and a house that they are responsible for. . they have to report that and get graded. ..

why not just sell it as a short sale and keep their hands clean?

just pondering. . .

Thank you, Fernando, that's where I was going (Comment # 6) to understand what the difference between the 2 actions means to the Seller. WHY do guys believe Sellers will "go for this" vs. a short sale?

If this really catches on, I will have to start rewriting my business plan. I can see that this could be advantageous for some, but...

I agree that this is bad news.  As to why this may become a trend--buyers prefer bank-owned properties to short sales.  Bank-owned properties have a higher sold price to list price ratio because of the short bid timeframe.  At least they do around here.  That may mean a bit more money for the lender at the end of the day.  But how does this affect the seller?

I honestly don't think that banks are going to be working hard on trying to entice an avalanche of deed-in-lieus for two main reasons: 1. The banks don't want the added risk that goes with them owning the property if they can avoid it, and 2. The stats are well known.  REOs are generally sold at about 20-25% discounts off of FMV.  They only take half that discount on the average short sale.

So, as long as the short sale is anticipated to close in about the same time of DOM as an average REO sale, I don't see any big advantage to the lender's to take the properties into REO. 

I'm no fan of the banks but I'd like to play the devil's advocate here and try and look at it from their point of view. Like Fernando said, they are still going to pay a commission when they sell, but by gaining quicker control of the properties, they can simplify the process and reduce their overall manhours (i.e $$$s) spent on short sales. Additionally, it seems like this would reduce their exposure to low-ball BPOs and short sale flips that I'm sure cost the banks a great deal of money as well. Just my 2 cents.

Bryant - I am not sure we are getting the whole picture with the article or with the Bank of America quote.  It's too hard to believe.  We know that it costs several thousand for a bank to take ownership and maintain a property, be it through deed-in-lieu or walk-away foreclosure. 

This could have a serious effect on our business.    Deed's in lieu for institutional lenders, were rarely, if ever done in residential real estate.  (In 25+ plus years as an escrow officer - I saw less than a dozen).

The lender's were never in the business to be property owners.  That is clearly changing.

Look at the way the large lenders have circumvented the appraisers, trying the hands of "good" mortgage brokers while cleaning out the bad and have been fighting for years to enter the real estate industry.

I don't know if there is clear intent to do this, but the last few years they have been siphoning off more money from each transaction to place on their side of the balance sheet.   

Sorry Briant,

Sorry Petra,

Sorry Stephnie,

Sorry Robin,

Sorry Andrea,

Sorry Kay,

Sorry susan,

Sorry Melissa,

Sorry Sharon,

Sorry Cathy,

Didn't you see this is a "public" post?

Now along comes an aggressive solution and you condemn it.

If you check the latest rules foreclosures, short sales and deed in lue all have about same affect on credit.

You're right about the affect on listing brokers, but in a calmer moment you may wish you'd let some one else say it!

This is a great program for defaulters and banks wanting to screw them! Realtors® are more often than not the only professional consult most troubled home owners talk to. With out the Realtors® who's going to advise them about avoiding deficiency balances?

Walk away with nothing or maybe as much as $15,000, that's as much as many put down in the begining.

Bill

You know, it gets old - banks trying to shaft everyone - when is this going to end?

BB - I have to agree with William on this one.  For some folks, this is a good deal.  Every set of circumstances needs to be weighed differently.