Hi folks. If you have been paying attention to the news over the last couple of weeks then you know that Chase, GMAC and Bank of America have suspended foreclosures in 23 States, including Florida. This is all related to employees signing documents and submitting them to the courts even though they never read them.
On top of this, the Attorney General in Florida is investigating 4 law firms for filing fraudulent foreclosure documents. And we have Title Companies refusing to issue policies on some of the foreclosures due to title risk. Richard Zaretsky wrote a great article about this yesterday.
To make matters even worse today I opened up my daily newsletter from the Florida Association of Realtors and found these two articles:
New legal tactic helps associations gain control of abandoned condos
- POMPANO BEACH, Fla. – Oct. 6, 2010 – After winning a lawsuit against Wells Fargo that claimed the bank purposely delayed foreclosure proceedings on a condominium unit for more than a year, a Pompano Beach condo association has been awarded title to the unit without owing a dime on the original $184,400 mortgage. READ THE ARTICLE
Judges revisiting foreclosure cases may help owners but clog market
- TAMPA, Fla. – Oct. 5, 2010 – On Florida’s west coast, where the housing bust has flooded courts with foreclosure filings, the chief judge of the 6th Judicial Circuit has little sympathy for lenders who have routinely submitted flawed and possibly fraudulent foreclosure cases. READ THE ARTICLE
Folks, we are in dire straights!!! As I expected lawsuits are starting to fly. People are getting pissed off at lenders who have been abusing the system for years and are starting to take action.
Foreclosures are no longer the property for buyers looking for a deal. They may get a deal but they will have no assurances that the property won't be taken away from them because the courts have rescinded the foreclosure. A foreclosure is a hostile take over and now these former homeowners have the legal ammunition to not only fight but to win the battle.
So what does all this mean for sellers looking to do a Short Sale? In my opinion Short Sales have just become easier to do. Lenders, not being able to foreclose, are going to be much more receptive to negotiating a Short Sale or settlement with the borrower. And since a Short Sale is a voluntary action on the part of both parties (lender and borrower) they will be a much safer bet for a new buyer. Chances are the Short Sale will not be rescinded and Title Companies will be able to issue a policy. A Short Sale has definitely become more attractive.
Of course this is just my opinion. What's yours?
Are you facing foreclosure in Florida?
Do NOT be foreclosed on! Avoid foreclosure. Short Sales DO close.
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Do NOT be foreclosed on! Avoid foreclosure. Short Sales DO close.
Want to find out more? www.CentralFloridaShortSales.com
***I am NOT an Attorney nor do I play one on TV. Click the button below for my Bio.
Tutas Towne Realty, Inc handles Florida real estate sales, Florida short sales, Florida strategic short sales, Florida pre-foreclosure sales, Florida foreclosures in Kissimmee Florida Short Sales, Davenport Florida Short Sales, Haines City Florida Short Sales, Poinciana Florida Short Sales, Solivita Florida Short Sales, Orlando Florida Short Sales, Celebration Florida Short Sales, Winderemere Florida Short Sales. Serving all of Polk, Osceola and Orange Counties Florida. Florida Short Sale Broker. Short Sale Florida.
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Man, you folks in Florida are deep in it! WOW. Here in OK, where we still have those old fashioned abstracts, we're pretty good to go in this latest mess.
PS - Nice video the other day! LOL
I haven't heard of anything like that in Hawaii, thanks for the information
Bryant - Excellent summary of the impact of this new problem in the wave of foreclosure activity. We're dealing with the same thing up here in Connecticut, and you're right... who would want to risk buying a foreclosure without additional assurances, or released from the previous homeowners in place? And how easy do we thing THAT would be to implement?
Great info for us Florida gang....I even had a client call worried that the foreclosed home they bought last year could be a problem for them. Didn't know how to answer that one either. It will be a wait and see. And for short sales, perhaps things will keep progressing to a faster review, negotiation, and approvals.
It looks like Mr. Archambault has some big thoughts there. :)
That is good news in a way. Hopefully it will make banks more receptive to short sales.
Wow, Bill used some large fonts. WIth all of the new things going on with title companies being less willing to issue title insurance to REOs, we (short sale agents of America) are sitting pretty.
Broker Bryant, Right on. Banks now have an incentive to do Short Sales the right way instead of dragging their feet ... and dragging homeowners straight into foreclosure. It couldn't have happened to better guys (tongue in cheek). And maybe ... just maybe ... putting the brakes on foreclosure might finally stabilize this down-down-down market.
Wait until I start my suit against all these lenders for my commissions lost & negotiating on bad faith. .
Broker Bryant, I would hope that short sales are getting easier. I don't think Missouri is one of the states that stopped foreclosures on. I could never verify it anywhere on the web. I have one short sale going to foreclosure next week and can't get anyone to acknowledge it.
BB,
Exactly the conclusion I have drawn. Short Sales a better risk right now than a foreclosure. I would add, undistressed retail resale just was done a favor too.
Guys,
The truth is I wrote it on line cutting and pasting from Bryant's post. The fonts carried forward and I couldn't get rid of them.
I'm open to polite suggestions.
Bill
Oh crap I think we are drinking the same kool-aid - got a similar post in draft mode on my wordpress blog!
Yep, the slicing and dicing of bundled mortgages brought on by the derivitive market has made it difficult for a lender to show a clear chain of title and prove they indeed have the legal right to foreclose and then sell a property.
Hi Bryant... Short Sales are certainly looking better and better all the time! My phone was ringing today for sure!
If they were just a little more predictable I think people would go for the short sales.
It's definitely going to make short sales look more attractive in many different places.
The Texas AG has called a halt to all foreclosures in Texas, both in the process of foreclosure and the ones that are foreclosed cannot be sold.
I'm glad I don't have an offer in on one, or working in REO.
I totally agree with you. Hopefully this mess will actually work for the Sellers/Buyers of short sales by the banks WANTING to short sale! I just keep thinking 'PRIDE COMES BEFORE THE FALL" and those banks were the poster child for PRIDEFUL!
Short Sales will definitely be easier to get approved, but on the other hand, homeowners may be slower to call for the help since they'll know the banks aren't foreclosing as agressively (or at all) as they had previously.
Thanks for posting BB!
Cameron
Corona & Chino Hills Short Sale Agent
California
Foreclosed properties (REO's and trustee sales) are and will continue to be a much better purchase for buyers than short sales. Short sale prices are based upon bank acceptance of a current "market value." Foreclosures have no such restrictions and buyers are able to obtain a distressed sale price for a distressed property. Not to mention extremely long and disruptive negotiations with short sale lenders.
The initiator of the foreclosure may have responsibility tothe previous owner if improper proceedings can be shown but the new buyer cannot be held responsible for their actions. I can't imagine any scenario where the property could be taken back from a new buyer who was not involved in the foreclosure proceedings...
Bryant, Thats correct the short sales have become the way to go. In california Wacohvia Bank was the first to expedite short sales. Now chase has come onboard. So short sales will move more faster and be more attactive as well.
My thoughts are if the banks know what's good for them, they'll agree to short sales. This is definitely good news for Florida and the other 22 states. I am interested to see how this is going to play out in non-judicial states, such as California. We'll have to wait and see.
Short sales may have just gotten easier in the near term in Texas. The Texas Attorney General has issued a letter to lenders in Texas calling a halt to foreclosures in Texas as well as the sale of foreclosed properties.
GMAC in California has countered 5 days from submittal via Equator. Short Sales treat me well.
I have already had an investor deal fall apart because the foreclosure he was interested in was yanked from the market. That within days of the news being announced that foreclosures were being scrutinized. I anticipate more to come. Thank goodness I've focused on Short Sales for the last couple of years!
A short sale just became so much less hassle for a bank as opposed to foreclosure. With title insurance companies starting to refuse to insure the title of certain foreclosures, this has the potential to shake the real estate market. It might amount to so much more than some bean counter at a bank thinking we can net a few thousand more with a foreclosure compared to a short sale. This could get very interesting very quickly. Thanks for posting about it.
Good morning all.
Bill I like you big fonts :) if you wanted to chang ethem just edit your comment if you can and copy it. Then just paste it in a word doc and set it the way you want and put it back in the post.
Things are certainly starting to get very interesting. Hopefully all of this has made my job a little easier.
I'll be back.
Can't agree that Short sales are more attractive. Buyers want to occupy. Give a buyer a choice: 30 day close on a foreclosure or 180 day close if you're lucky on a short sale?
Unless the short sale process can be streamlined and well intentioned policies stop doing the opposite, foreclosures with their fast possession and closings may still have the edge.
Thanks for the perspective and summary. How to maneuver this with clients who have offers in on foreclosure properties is a challenge.
Yes I've been reading all this news and hoping our short sales will have an easier time of going through - in a more timely manner. We're still flooded with reo's with many more on the books so we'll see what shakes down here in AZ. No lawsuits yet....but that's a yet. We all expect there to be at some pointl.
BB, wouldn't a short sale- or ANY sale- face the same issues if, when it goes to closing, there is a flawed transfer of assignments (flawed meaning fraud) on the sellers title? I wonder if we should be looking at titlework before taking listings. Amazing.
All true Bryant, as long as the banks continue to process and approve the short sales. They could get nasty on that front also.
Forecloses are definitely on the back burner now. Sometimes I fail to understand the banks anyway. I know someone who went thru bankruptcy, surrendered house on bankruptcy filing but even after discharge the lender is going the foreclosure route....
Between the two, I'll take short sales, but they are still not an exact science.
Talk about a weird paradigm shift - Shortsales being easier !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!*L*
Well, let's hope they make short sales easier. Although Mi was not named in the states 23 we still have a multitude of mortgages written by the big banks.
Thanks for the interesting point of view. You learn a lot from Active Rain.
Very valid poing Bryant. This may just be the wake up call that the lenders needed. It's good for buyers, sellers and in the end also agents that work the short sale market.
Bryant, your point makes sense. The short sale process should become easier.
Short sales are getting easier to process. Hopefully, more agents will get involved and focus on selling short sales. I'm still surprised when I run into buyer's agents who won't even show them because they perceive them to be a waste of time. That's a short-sighted business model.
Bryant, great post. You're dead on. Short sales are the new buzz word. By the way, did you and Renee call each other this morning to decide what to write about, like high school girls deciding what to wear? Just curious. lol
Bryant,
You nailed it! I had a conversation with my attorney about this yesterday and he confirmed what you are saying. In a short sale, there is a standard closing that the seller signs off on as opposed to a "hostile Take Over". I am told that the title insurance companies have the majority of the risk. Old Republic is already halting title insurance policies on many foreclosures. Fun stuff ahead.
Clayton
Bryant,
I fear this is only the tip of the iceburg, it could get very bad very quickly.
-Brent
I agree but it does depend on how long all of this drags out. Banks seem to be impervious to doing the "smart" thing when it comes to short sales anyway. How many times have we seen them tank a short sale because of a $35 BPO which says they should get $5000 on a property and the buyer walks? And, I think they will find title companies that will write the risk and be able to keep moving although maybe at a slower pace or higher cost.
Short sales seem to be becoming more appealing already. Hopefully banks WILL move then along.
Indeed I do believe that the short sale just started looking incredibly more attractive to everyone. This is just such a mess to wade through.
Bryant,
I join you in your opinion. Lenders were extremely arrogant and callous in their rejection of valid short sale offers. Now short sales is a way for them to avoid the foreclosure morass.
Hi Bryant. I wonder about the other 27 states that do not have a judicial foreclosure process. Meanwhile in Tampa Bay too... short sales are a little attractive these days considering.
I just hope that the short sales do not somehow suffer a similar fate as the REO business has in the last few weeks. If the owner and their lender are agreeable, it probably but won't but these last 2 years seem to just have surprise after surprise pop up.
I heard last week that Old Republic Title is no longer insuring foreclosure transactions but I don't recall whether that's solely in Sacramento or statewide in California. Anyway, that was my exact thoughts. I echo Melissa. We short sale agents are sitting pretty.
Hi Bryant, I wrote an article about this yesterday as well at my Lancaster Real Estate Blog - I had had a meeting with our Title partner's manager and the subject came up. I grasped the magnitude of this immediately! Unfortunately the same landers who screw up the foreclosure process also oversee the short sale process...
Hi Bryant, we are in Nevada and do short sales and foreclosures. Our foreclosure pipeline has definitely slowed but the short sales haven't gotten any easier. I personally think some of this is political posturing due to AG's running for re-election. We'll see how things are after November 2nd.
Hi Bryant, Totally agree. I read the article and it seems clear that the momentum has just turned in favor of the short sales. Not a huge amount but still a boost !
Bryant - I agree 100 percent, and just like Renee, I was in process of writing my own version of this post. SInce you beat me to the punch, I'll just give you the credit and reblog your post. Maybe I can send a customer your way some day.
A great way to put it: Forclosures are hostile take overs.
I agree too. If banks don't want any more foreclosures the best thing they can do is approve more Short Sales!!
BB...I'm inclined to agree with you! People have to realize that we're in an election year and the courts of public opinion RULE! Given the most recent discovery of how banks have been rubberstamping foreclosures, I'm pretty sure that we're going to see the banks become wayyyyyyy more amenable to short sales.
My wall adjoins our inhouse lender. Our firm offers real estate, lending and title services. The escalation in calls about pending loans on REO purchases has escalated in the past few days.
My attention is swiveling back ti short sales for "right now" buyers. A surprise. Suddenly the "approved" short sale looks really good.
Hi Bryant - I think you are right on the money as usual. The foreclosure mess is leaking into the buyers world now as well and definitely making short sales look better and better!
Oh what strange times we live in. It is getting thicker and deeper out there. Agree with you on all points. Now what is round the corner? Does anyone see a double dip out there?
I think this whole situation is atrocious! What next? Perhaps this will actually help to stabilize the market instead of keeping it in a prolonged state of uncertainty. I have heard mixed reviews. So here we go again!
I have been thinking that pushing Short Sales and honest modifications may be the only way out for the banks.
Bryant,
Short sales look better than foreclosures right now BUT the good ole straight sale is the jewel right now. Prices on those should start to stabilize since there will be tangible advantages to going the old-fashioned sale route.
Cheers,
Brian Geraghty, Briaker
David Wain Realty, LLC
Fort Lauderdale, FL
I just hope these banks realize the same thing. I really wish these banks would have done something two years ago when we brought a lot of these problems up, but I'm worried people that just stopped paying on their mortgage with no desire to do a loan modification or a short sale may get their homes back. I can understand if they were trying to work with the bank and they still were foreclosed on, I would be upset also, but I see some people taking advantage of this situation for their own gain.
Bryant - Excellent research and links on your article. Short sales are rising to the top.
Filling the pipeline with foreclosures has been bad for all of us. I hope the lenders become more accomodating to short sales and loan modifications. They make it way too difficult now. Foreclosures often end up vacant and destroy the value of a neighborhood. Short sales and loan modifications have parties with an interest in maintaining the property.