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I was moving my family from Kansas in 2012, and it seemed like a great time to buy a home. Throughout the valley, houses were available for a fraction of what they sold for only a few years ago.
There were traditional sales, foreclosures and short sales (where the lender allows the owner to sell the house at current market value, even if the existing mortgage is a lot more).
We decided to stay away from foreclosed homes and instead focused on either traditional or short sales.
Little did we know, a short sale is a real estate transaction that is easily convoluted and confused by pencil-pushing paper-shufflers at banks who seem to change the rules and expectations, offer hollow assurances and show no empathy for anxiety-ridden customers as the process unfolds.
And so this is our cautionary tale for those of you who are thinking of pursuing a short sale. For starters, forget the word “short.” There was nothing short about it.
Im sorry, but this writer is a weenie. They were told at the beginning to expect a six month wait.
Utities were off? Thats an agent boo-boo, as is the water heater.
The financing hurdles are pretty standard and common for the big banks. They're all incompetent, thats why the economy crashed.
Vote with your feet & use a local credit union if you want a banker that is capable of tying his/her own shoes. At least with a local credit union, you can go thump on someone's desk if they kink your deal.
The message that no one got from the market crash is that the too-big-to-fail banks need to be "right-sized", sliced, diced & pared down into manageable, *accountable* lenders.
im sorry, but this writer is a weenie. They were told at the beginning to expect a six month wait.
Utities were off? Thats an agent boo-boo, as is the water heater.
The financing hurdles are pretty standard and common for the big banks. They're all incompetent, thats why the economy crashed.
Vote with your feet & use a local credit union if you want a banker that is capable of tying his/her own shoes. At least with a local credit union, you can go thump on someone's desk if they kink your deal.
the message that no one got from the market crash is that the too-big-to-fail banks need to be "right-sized", sliced, diced & pared down into manageable, *accountable* lenders.
Im sorry, but this writer is a weenie. They were told at the beginning to expect a six month wait.
Utities were off? Thats an agent boo-boo, as is the water heater.
The financing hurdles are pretty standard and common for the big banks. They're all incompetent, thats why the economy crashed.
Vote with your feet & use a local credit union if you want a banker that is capable of tying his/her own shoes. At least with a local credit union, you can go thump on someone's desk if they kink your deal.
The message that no one got from the market crash is that the too-big-to-fail banks need to be "right-sized", sliced, diced & pared down into manageable, *accountable* lenders.
The beatings will continue until morale improves.
Agreed
We had a short sale that lasted us 9 months which we closed in August 2011 before they even implemented measures to "fast track" the process. We did our research before signing a contract offer and realized it could be really long. A good real estate agent experienced in short sales goes a long way. I'm willing to bet a lot that I know more about the short sale process than real estate agents who've never been through the process before.
If you are moving to an area and considering a short sale: Better off renting and trying to find a shorter term 7 month rental than go month to month for an extra $100-200. It costs less than $2000 to have a locally move once you move to your new area. I really do not understand why people dislike "moving twice". It actually cost me less than $1000 to move locally and thats with professional movers. You can find boxes for free at local grocery store, pack things yourself. Local movers usually charge $100-$130 an hour.
People just try to nickel and dime so much they miss the big picture.
The writer knew short sales takes a long time to began with. So if you go into the mind set that offers will fail and those that are accepted could take 9 plus months you will be fine.
And we all know by now all the reasons for delays with short sales. Instead of dealing just with sellers directly and you own potential mortgage company. You are adding 3-5 more layers (sellers, seller's lenders, 2nd mortgage holders, home equity lien holders, investors, potential county property tax liens, potential HOA liens etc).
Don't blame the banks for delaying. If you lent someone $500K and they were going to stiff you $200K in a short sell. Wouldn't you want to examine everything before approving the short sell? Wouldn't your investors want to examine everything?
Don't blame the banks for delaying. If you lent someone $500K and they were going to stiff you $200K in a short sell. Wouldn't you want to examine everything before approving the short sell? Wouldn't your investors want to examine everything?
LOL.. the banks don't check anything on short-sales - the loss is passed onto the feds after they tack on fees for "managing" the foreclosure/short-sale process.
The judge is $600k underwater on her Michigan home, doesn't want to pay anymore, so she transfers her $700k paid-off Florida home into her daughter's name, then pleads poverty to the bank.
Somewhere in there she bought another house for cash as well.
Successfully.
Keep in mind, Michigan is a "recourse" state, meaning the bank had the option to attach her future earnings and take her other assets to pay the shortfall off. This judge will retire with an estimated $98,000 annual pension, and free healthcare.
She was only caught because she caught the attention of the TV news. I've personally reported several fraudulent deals to both the FBI's "mortgage fraud task force" and the local news, and they never even bothered to reply.
No one cares, no one is watching the hen-house, and that's why your grandkids can look forward to higher taxes.
LOL.. the banks don't check anything on short-sales - the loss is passed onto the feds after they tack on fees for "managing" the foreclosure/short-sale process.
The judge is $600k underwater on her Michigan home, doesn't want to pay anymore, so she transfers her $700k paid-off Florida home into her daughter's name, then pleads poverty to the bank.
Somewhere in there she bought another house for cash as well.
Successfully.
Keep in mind, Michigan is a "recourse" state, meaning the bank had the option to attach her future earnings and take her other assets to pay the shortfall off. This judge will retire with an estimated $98,000 annual pension, and free healthcare.
She was only caught because she caught the attention of the TV news. I've personally reported several fraudulent deals to both the FBI's "mortgage fraud task force" and the local news, and they never even bothered to reply.
No one cares, no one is watching the hen-house, and that's why your grandkids can look forward to higher taxes.
I agree. Many banks (maybe most banks) don't verify but some banks do verify. It really depends who is doing their job and who isn't doing their job. If you got some lazy overworked underpaid reviewer. They may not give a crap and process the approval.
That's why I have posted numerous times why I have been against the mortgage and forgiveness debt act that's contributed to this short sale boom. Adding more distress properties to the market. There will be fraud.
Once people know they aren't face with IRS tax consequences from the sale of their primary home from a short sale, it's a green light to commit fraud.
Short sales will go down to zero once the Mortgage Forgiveness Act expires (they keep on extending and still extending it another 12 months until December 31st 2013 now).
And look at the consequences of this Judge. She got caught. What's the penalty? There is NO CRIMINAL charge. It's ridiculous. So what if she loses her $700K Florida home. She already screwed the bank $600K on her Michigan home. Sure go after her. She will just retire and declare BK and still collect her pension.
The judge rolled the diced. And the consequences were literally nothing.. She basically "loses" her $700K Florida home after getting a $600K mortgage debt waived. It's basically a wash since who knows if she could have sold her Orlando area home for $700K anyways plus real estate commission and transfer taxes would have cost her another $50K or so more to sell the home. And she faces no criminal action.
Edit: Just read an update on her case. She did just get charged 4 days ago.
Knowing our Judicial system, she won't get any jail time.
My friend did a "modified" version of what the Judge in Michigan did. Except he covered his tracks more than the Judge. He did have a "hardship" cause he got strategically divorce and said he had to pay alimony and child support for the kids for his non working spouse. He than forced a "termination" from his high paying $400K a year job to start his own medical practice. So he had this "termination paper" to show to the banks. Of course starting your own practice, you can afford to show a "business loss" for at least 2 years.
He set this up like a pro. The bank let him short sale his "primary" beach condo for a $300K lost in 2011 And also let him short sale his "primary home" single family home in 2012 for another $350K loss. He settled a another $150K home equity loan for 15K pay off also. Notice he had "2" primary homes in 2 different years. In the mean time after the short sale on the second home in 2012 completed he went brought a very nice home in the Orlando area in late 2012 (not far from their same home that Michigan Judge owns in Florida). He purchased the home for like $600K cash.
That's how you game the system.
The Michigan judge didn't cover her tracks enough. She should have just retired and taken the lower salary, divorce her husband, give him the Florida paid off home in the divorce settlement and than claim hardship. She didn't plan this at all.
Yes strategic divorce is the new game in town to prove hardship. And you need to cover your tracks by renting another home for your spouse to live in for at lease 12 months to cover yourself.
Last edited by aneftp; 01-23-2013 at 05:13 PM..
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